AGREEMENT AND PLAN OF MERGER By and Among ROMA FINANCIAL CORPORATION, ROMA BANK, STERLING BANKS, INC. and STERLING BANK Dated as of March 17, 2010
By
and Among
ROMA
FINANCIAL CORPORATION,
ROMA
BANK,
STERLING
BANKS, INC.
and
STERLING
BANK
Dated
as of March 17, 2010
TABLE
OF CONTENTS
ARTICLE
1 – THE MERGER
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2
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Section
1.1
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Consummation
of Merger; Closing Date
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2
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Section
1.2
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Effective
Time of the Merger
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2
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Section
1.3
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Effect
of Merger
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2
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Section
1.4
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Further
Assurances
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3
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ARTICLE
2 – CONVERSION OF CONSTITUENTS’ CAPITAL SHARES
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4
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Section
2.1
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Manner
of Conversion of Sterling Shares
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4
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Section
2.2
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Effectuating
Conversion of Sterling Shares
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4
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Section
2.3
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Sterling
Stock Options
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6
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Section
2.4
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Determination
of Alternative Structures
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6
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Section
2.5
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Laws
of Escheat
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6
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Section
2.6
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Adjustment
to Merger Consideration
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6
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ARTICLE
3 – REPRESENTATIONS AND WARRANTIES OF STERLING
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7
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Section
3.1
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Corporate
Organization
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7
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Section
3.2
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Capitalization
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8
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Section
3.3
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Financial
Statements; Filings
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9
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Section
3.4
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Loan
Portfolio; Reserves
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10
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Section
3.5
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Certain
Loans and Related Matters
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10
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Section
3.6
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Authority;
No Violation
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11
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Section
3.7
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Consents
and Approvals
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12
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Section
3.8
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Broker’s
Fees
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12
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Section
3.9
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Absence
of Certain Changes or Events
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12
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Section
3.10
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Legal
Proceedings; Etc.
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12
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Section
3.11
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Taxes
and Tax Returns
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12
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Section
3.12
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Employee
Benefit Plans
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14
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Section
3.13
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Title
and Related Matters
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17
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Section
3.14
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Real
Estate
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17
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Section
3.15
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Environmental
Matters
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18
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Section
3.16
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Commitments
and Contracts
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19
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Section
3.17
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Regulatory
Matters
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21
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Section
3.18
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Antitakeover
Provisions
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21
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Section
3.19
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Insurance
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21
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Section
3.20
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Labor
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21
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Section
3.21
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Compliance
with Laws
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22
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Section
3.22
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Transactions
with Management
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23
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Section
3.23
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Derivative
Contracts
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23
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Section
3.24
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Deposits
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24
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Section
3.25
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Accounting
Controls; Disclosure Controls
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24
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Section
3.26
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SEC
Filings
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25
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Section
3.27
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Proxy
Materials
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25
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Section
3.28
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Deposit
Insurance
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25
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Section
3.29
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Intellectual
Property
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25
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Section
3.30
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Untrue
Statements and Omissions
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26
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i
Section
3.31
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Fairness
Opinion
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26
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Section
3.32
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No
Trust Powers
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26
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Section
3.33
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Registration
Obligations
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26
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Section
3.34
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Investment
Securities
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26
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ARTICLE
4 – REPRESENTATIONS AND WARRANTIES OF ROMA
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26
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Section
4.1
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Organization
and Related Matters of Roma
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26
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Section
4.2
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Authorization
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27
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Section
4.3
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Consents
and Approvals
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27
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Section
4.4
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Proxy
Materials
|
27
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Section
4.5
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Regulatory
Matters
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28
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Section
4.6
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Access
to Funds
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28
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Section
4.7
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Untrue
Statements and Omissions
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28
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ARTICLE
5 – COVENANTS AND AGREEMENTS
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28
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Section
5.1
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Conduct
of the Business of Sterling and Sterling Bank
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28
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Section
5.2
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Current
Information
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32
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Section
5.3
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Access
to Properties; Personnel and Records; Systems Integration
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32
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Section
5.4
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Approval
of Shareholders
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34
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Section
5.5
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No
Other Bids
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34
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Section
5.6
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Maintenance
of Properties; Certain Remediation and Capital
Improvements
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35
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Section
5.7
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Environmental
Audits
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35
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Section
5.8
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Title
Insurance
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36
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Section
5.9
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Surveys
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36
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Section
5.10
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Consents
to Assign and Use Leased Premises
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36
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Section
5.11
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Compliance
Matters
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36
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Section
5.12
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Support
Agreements
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36
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Section
5.13
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Disclosure
Controls
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36
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ARTICLE
6 – ADDITIONAL COVENANTS AND AGREEMENTS
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37
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Section
6.1
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Best
Efforts, Cooperation
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37
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Section
6.2
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Regulatory
Matters
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37
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Section
6.3
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Employment
and Employee Benefit Matters
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38
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Section
6.4
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Indemnification
|
39
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Section
6.5
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Transaction
Expenses of Sterling
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40
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Section
6.6
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Press
Releases
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41
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Section
6.7
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Prior
Notice and Approval Before Payments To Be Made
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41
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Section
6.8
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Boards
of Directors of Roma and Roma Bank
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42
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Section
6.9
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Supplemental
Indenture
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42
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Section
6.10
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Notification
of Certain Matters
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42
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ARTICLE
7 – MUTUAL CONDITIONS TO CLOSING
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42
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Section
7.1
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Shareholder
Approval
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42
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Section
7.2
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Regulatory
Approvals
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42
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Section
7.3
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Litigation
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42
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Section
7.4
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Disclosure
Supplements
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43
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ii
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43
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Section
8.1
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Representations
and Warranties
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43
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Section
8.2
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Performance
of Obligations
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43
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Section
8.3
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Certificate
Representing Satisfaction of Conditions
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43
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Section
8.4
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Consents
Under Agreements
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44
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Section
8.5
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Material
Condition
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44
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Section
8.6
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Certification
of Claims
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44
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Section
8.7
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Audited
Financial Statements
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44
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Section
8.8
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Minimum
Tangible Equity
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44
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Section
8.9
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Nonperforming
Assets
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44
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Section
8.10
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Environmental
Audit Results
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44
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Section
8.11
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Option
Cancellation Agreements
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44
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Section
8.12
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Support
Agreements
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45
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Section
8.13
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Addenda
to Change in Control Severance Agreements
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45
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ARTICLE
9 – CONDITIONS TO OBLIGATIONS OF STERLING
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45
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Section
9.1
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Representations
and Warranties
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45
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Section
9.2
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Performance
of Obligations
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45
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Section
9.3
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Certificate
Representing Satisfaction of Conditions
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45
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ARTICLE
10 – TERMINATION, WAIVER AND AMENDMENT
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46
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Section
10.1
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Termination
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46
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Section
10.2
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Effect
of Termination; Termination Fee
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47
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Section
10.3
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Amendments
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48
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Section
10.4
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Waivers
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48
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Section
10.5
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Non-Survival
of Representations, Warranties and Covenants
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48
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ARTICLE
11 – MISCELLANEOUS
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49
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Section
11.1
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Definitions
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49
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Section
11.2
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Entire
Agreement
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51
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Section
11.3
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Notices
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51
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Section
11.4
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Severability
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52
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Section
11.5
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Costs and
Expenses
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53
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Section
11.6
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Captions
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53
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Section
11.7
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Counterparts
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53
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Section
11.8
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Persons
Bound; No Assignment
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53
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Section
11.9
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Governing
Law
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53
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Section
11.10
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Exhibits and
Schedules
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53
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Section
11.11
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Waiver
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53
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Section
11.12
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Specific
Performance
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53
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Section
11.13
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Construction
of Terms
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54
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Exhibits
|
||||
Exhibit
A
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Plan
of Merger
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Exhibit
B
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Forms
of Support Agreement
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Exhibit
C
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Form
of Addendum to Change in Control Severance Agreements
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Exhibit
D
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Form
of Addendum to Employment Agreement
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Exhibit
E
|
Form
of Option Cancellation and Release Agreement
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iii
By
and Among
ROMA
FINANCIAL CORPORATION
ROMA
BANK
STERLING
BANKS, INC.
and
STERLING
BANK
This
AGREEMENT AND PLAN OF MERGER, dated as of the 17th day
of March, 2010 (this “Agreement”), by and among Roma Financial Corporation, a
federal MHC subsidiary holding company (“Roma”), Roma Bank, a federal savings
bank (“Roma Bank”), Sterling Banks, Inc., a New Jersey corporation (“Sterling”),
and Sterling Bank, a New Jersey-chartered commercial bank (“Sterling Bank”)
(collectively, the “Parties”).
WITNESSETH
THAT:
WHEREAS,
the Boards of Directors of each of Roma and Xxxxxxxx xxxx it in the best
interests of Roma and Sterling, respectively, and of their respective
shareholders, that Roma and Sterling enter into an agreement pursuant to which
Roma will acquire all of the issued and outstanding shares of capital stock of
Sterling through the merger of a wholly owned acquisition subsidiary of Roma
with and into Sterling (the “Merger”);
WHEREAS,
Roma intends that, immediately following the Merger, Sterling will be merged
with and into Roma, with Roma as the surviving corporation, and Sterling Bank
will be merged with and into Roma Bank, with Roma Bank as the surviving
institution;
WHEREAS,
as an inducement and condition to Roma’s entering into this Agreement, each of
the directors and executive officers of Sterling and Sterling Bank in their
individual capacity have entered into Support Agreements in the form attached as
Exhibit B hereto with Roma pursuant to which they have agreed to take certain
actions in support and cooperation of the Merger and the surviving corporation;
and
WHEREAS,
concurrently with the execution of this Agreement, Roma and Roma Bank have
entered into an Addendum to the Change in Control Severance Agreement in
the form attached as Exhibit C hereto with certain of the officers of Sterling
and Sterling Bank who are parties to Change in Control Severance Agreements with
Sterling and Sterling Bank;
NOW,
THEREFORE, in consideration of the mutual covenants, representations, warranties
and agreements herein contained, the Parties agree that all of the outstanding
shares of common stock of Sterling will be acquired by Roma through the merger
of an acquisition subsidiary of Roma with and into Sterling and that the terms
and conditions of the Merger, the mode of carrying the Merger into effect,
including the manner of converting the shares of common stock of Sterling into
cash, shall be as hereinafter set forth.
1
ARTCLE
1
THE
MERGER
Section
1.1 Consummation
of Merger; Closing Date.
On the
terms and subject to the conditions set forth in this Agreement, at the
Effective Time of the Merger, Roma Financial Acquisition Subsidiary, Inc., a
corporation to be organized under the laws of State of New Jersey as a wholly
owned subsidiary of Roma for the sole purpose of facilitating the Merger
(“Merger Sub”), shall be merged with and into Sterling pursuant to the
provisions of the New Jersey Business Corporation Act (“NJBCA”) and the separate
corporate existence of Merger Sub shall cease. Sterling shall be the
surviving corporation of the Merger (sometimes hereinafter referred to as the
“Surviving Corporation”) and shall continue its corporate existence under the
laws of the State of New Jersey as a subsidiary of Roma. The Merger
shall be consummated pursuant to the terms and conditions of this Agreement,
which has been approved and adopted by each of the Boards of Directors of Roma,
Roma Bank, Sterling and Sterling Bank, and of the Plan of Merger to be entered
into by and between Merger Sub and Sterling substantially in the form appended
as Exhibit A, which will be approved and adopted by the Boards of Directors of
Sterling and of Merger Sub and by Roma as the sole shareholder of Merger
Sub.
Section
1.2 Effective Time of the
Merger. (a) Subject to the prior satisfaction or
waiver of the conditions set forth in Articles 7, 8 and 9 hereof, the Merger
shall become effective as of the date and time specified in the Certificate of
Merger to be filed with the New Jersey Office of the State Treasurer pursuant to
the NJBCA (such time is hereinafter referred to as the “Effective Time of the
Merger”). Subject to the terms and conditions hereof, unless
otherwise agreed upon in writing by Roma and Sterling, the Effective Time of the
Merger shall occur on the tenth (10th) business day following the later to occur
of (i) the effective date (including expiration of any applicable waiting
period) of the last required Consent (as defined herein) of any Regulatory
Authority (as defined herein) having authority over the transactions
contemplated under this Agreement and the satisfaction of all of the other terms
and conditions of this Agreement and (ii) the date on which the shareholders of
Sterling approve the transactions contemplated by this Agreement, or at such
other time as the Parties may agree.
(b) The
closing of the Merger (the “Closing”) shall take place at the principal offices
of Roma at 10:00 a.m. local time on the day that the Effective Time of the
Merger occurs, or such other date, time and place as the Parties may agree (the
“Closing Date”). Subject to the provisions of this Agreement, at the
Closing there shall be delivered to each of the Parties hereto the certificates
and other documents and instruments required to be so delivered pursuant to this
Agreement.
Section
1.3 Effect
of Merger. (a) At the Effective Time of the
Merger, Merger Sub shall be merged with and into Sterling and the separate
corporate existence of Merger Sub shall cease. Sterling shall be the
Surviving Corporation in the Merger, and the name of the Surviving Corporation
shall be as set forth in Sterling’s Certificate of Incorporation as in effect
immediately before the Effective Time.
2
(b) At the Effective Time
of the Merger, each issued and outstanding Sterling Share immediately prior
thereto shall, by virtue of the Merger, be canceled and converted into the right
to receive the Merger Consideration, as defined in Section 2.1 of this
Agreement.
(c)
The Certificate of Incorporation and Bylaws of Sterling, each as in effect
immediately prior to the Effective Time of the Merger, shall be the Certificate
of Incorporation and Bylaws, respectively, of the Surviving
Corporation.
(d)
The directors and officers of Merger Sub immediately prior to the Effective Time
of the Merger shall be the directors and officers of Sterling as the Surviving
Corporation.
(e) The
Surviving Corporation shall have all the rights, privileges, immunities and
powers and shall be subject to all the duties and liabilities of a New Jersey
corporation and shall thereupon and thereafter possess all other privileges,
immunities and franchises of a private, as well as of a public nature, of each
of the constituent corporations. The Merger shall have the effects
set forth in federal law and the NJBCA. All property (real, personal
and mixed) and all debts on whatever account, including subscriptions to shares,
and all chooses in action, all and every other interest, of or belonging to or
due to each of the constituent corporations so merged shall be taken and deemed
to be transferred to and vested in the Surviving Corporation without further act
or deed. The title to any real estate, or any interest therein,
vested in any of the constituent corporations shall not revert or be in any way
impaired by reason of the Merger. The Surviving Corporation shall
thenceforth be responsible and liable for all the liabilities and obligations of
each of the constituent corporations so merged and any claim existing or action
or proceeding pending by or against either of the constituent corporations may
be prosecuted as if the Merger had not taken place or the Surviving Corporation
may be substituted in its place. Neither the rights of creditors nor
any liens upon the property of any constituent corporation shall be impaired by
the Merger.
Section
1.4 Further
Assurances. If, at any time after the Effective Time of
the Merger, Roma shall reasonably consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary or desirable to
(i) vest, perfect or confirm, of record or otherwise, in Roma its right, title
or interest in, to or under any of the rights, properties or assets of Sterling
or Sterling Bank or (ii) otherwise carry out the purposes of this Agreement,
Sterling and its officers and directors shall be deemed to have granted to Roma
an irrevocable power of attorney to execute and deliver, in such official
corporate capacities, all such deeds, assignments or assurances in law or any
other acts as are necessary or desirable to (a) vest, perfect or confirm, of
record or otherwise, in Roma its right, title or interest in, to or under any of
the rights, properties or assets of Sterling or Sterling Bank or (b) otherwise
carry out the purposes of this Agreement, and the officers
and directors of Roma are authorized in the name of Sterling or
otherwise to take any and all such action.
3
ARTCLE
2
CONVERSION
OF CONSTITUENTS’ CAPITAL SHARES
Section
2.1 Manner
of Conversion of Sterling Shares. Subject to the
provisions hereof, as of the Effective Time of the Merger and by virtue of the
Merger and without any further action on the part of Roma, Roma Bank, Sterling,
Sterling Bank, Merger Sub or the holder of any shares of any of them, the shares
of the constituent corporations shall be converted as follows:
(a) Each
share of capital stock of Merger Sub outstanding immediately prior to the
Effective Time of the Merger shall, after the Effective Time of the Merger, be
exchanged for one Sterling Share (as defined below).
(b) Each
share of common stock of Sterling, par value $2.00 per share (the “Sterling
Shares”), held by Sterling or by Roma (or any of their subsidiaries), except
such shares held in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired and no consideration shall be paid or
delivered in exchange therefor.
(c) Except
with regard to Sterling Shares excluded under Section 2.1(b) above and subject
to adjustment as set forth in Section 2.6 hereof, each Sterling Share
outstanding immediately prior to the Effective Time of the Merger shall be
converted into the right to receive a cash amount equal to $2.52 (the “Merger
Consideration”).
Thereafter,
subject to Section 2.5, each outstanding certificate representing a Sterling
Share shall represent solely the right to receive the Merger
Consideration.
Section
2.2 Effectuating
Conversion of Sterling Shares. (a) At the
Effective Time of the Merger, Roma will deliver or cause to be delivered to a
third-party agent to be appointed by Roma and reasonably acceptable to Sterling
(the “Exchange Agent”) an amount of cash equal to the aggregate Merger
Consideration to be paid pursuant to Section 2.1. As promptly as
practicable after the Effective Time of the Merger, the Exchange Agent shall
send or cause to be sent to each former holder of record of Sterling Shares
transmittal materials (the “Letter of Transmittal”) for use in exchanging their
certificates that formerly represented Sterling Shares for the consideration
provided for in this Agreement. The Letter of Transmittal will
contain instructions with respect to the surrender of certificates representing
Sterling Shares and the receipt of the consideration contemplated by this
Agreement and will require each holder of Sterling Shares to transfer good and
marketable title to such Sterling Shares to Roma, free and clear of all liens,
claims and encumbrances.
(b) At the
Effective Time of the Merger, the stock transfer books of Sterling shall be
closed as to holders of Sterling Shares immediately prior to the Effective Time
of the Merger and no transfer of Sterling Shares by any such holder shall
thereafter be made or recognized and each outstanding certificate formerly
representing Sterling Shares shall, without any action on the part of any holder
thereof, no longer represent Sterling Shares. If, after the Effective
Time of the Merger, certificates are properly presented to the Exchange Agent,
such certificates shall be exchanged for the Merger Consideration.
4
(c) In the
event that any holder of record as of the Effective Time of the Merger of
Sterling Shares is unable to deliver the certificate that represents such
holder’s Sterling Shares, the Exchange Agent, in the absence of actual notice
that any Sterling Shares theretofore represented by any such certificate have
been acquired by a bona fide purchaser shall deliver to such holder the Merger
Consideration upon the presentation of all of the following:
(i)
|
An
affidavit or other evidence to the satisfaction of the Exchange Agent or
Roma that any such certificate has been lost, wrongfully taken or
destroyed;
|
(ii)
|
Such
security or indemnity as may be reasonably requested by the Exchange Agent
or Roma to indemnify and hold it harmless in respect of such stock
certificate(s); and
|
(iii)
|
Evidence
to the reasonable satisfaction of the Exchange Agent or Roma that such
holder is the owner of Sterling Shares theretofore represented by each
certificate claimed by such holder to be lost, wrongfully taken or
destroyed and that such holder is the person who would be entitled to
present each such certificate for exchange pursuant to this
Agreement.
|
(d) If the
delivery of the consideration contemplated by this Agreement is to be made to a
person other than the person in whose name any certificate representing Sterling
Shares surrendered is registered, such certificate so surrendered shall be
properly endorsed (or accompanied by an appropriate instrument of transfer),
with the signature(s) appropriately guaranteed, and otherwise in proper form for
transfer, and the person requesting such delivery shall pay any transfer or
other taxes or expenses required by reason of the delivery to a person other
than the registered holder of such certificate surrendered or establish to the
reasonable satisfaction of the Exchange Agent or Roma that such tax or expenses
have been paid or are not applicable.
(e) Except as provided
in Sections 2.2(c) and (d), the consideration contemplated by this Agreement
shall not be paid to the holder of any unsurrendered certificate or certificates
representing Sterling Shares, and neither the Exchange Agent nor Roma shall be
obligated to deliver any of the consideration contemplated by this Agreement
until such holder shall surrender the certificate or certificates representing
Sterling Shares as provided for by the Agreement. Subject to
applicable laws, following surrender of any such certificate or certificates,
there shall be paid to the holder of the certificate or certificates formerly
representing Sterling Shares, without interest at the time of such surrender,
the Merger Consideration.
(f) Roma or the
Exchange Agent will be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement or the transactions contemplated
hereby to any holder of Sterling Shares, such amounts as Roma (or any Affiliate
thereof) or the Exchange Agent is required to deduct and withhold with respect
to the making of such payment under the Code, or any applicable provision of
U.S. federal, state, local or non-U.S. Tax law. To the extent that
such amounts are properly withheld by Roma or the Exchange Agent, such withheld
amounts will be treated for all purposes of this Agreement as having been paid
to the
5
holder of
the Sterling Shares in respect of whom such deduction and withholding were made
by Roma or the Exchange Agent.
Section
2.3 Sterling
Stock Options. As of and immediately prior to the
Effective Time of the Merger, all rights with respect to Sterling Shares
issuable pursuant to the exercise of stock options (“Sterling Options”) granted
by Sterling under the Sterling Stock Option Plans set forth in Sterling Schedule
2.3 (the “Sterling Stock Option Plans”), each of which is listed and described
on Sterling Schedule 2.3, that are outstanding at the Effective Time of the
Merger and that have not yet been exercised, shall be canceled with no
consideration because the Merger Consideration is less than the option exercise
price. Sterling shall take such action as is necessary under the
Sterling Stock Option Plans to cancel all outstanding Sterling Options as of the
Effective Time of the Merger, or solely with respect to the 2008 Director Stock
Option Plan and the 2008 Employee Stock Option Plan, (the “2008 Plans”),
terminate such Sterling Options issued thereunder, making them redeemable by
Sterling at or immediately after the Effective Time of the Merger, in each case
with no consideration paid to the holders of such Sterling
Options. If Sterling fails to take such action, or such action
requires the consent of any option holder, the holders of Sterling Options shall
have executed and delivered an Option Cancellation and Release Agreement in the
form set forth as Exhibit E hereto.
Section 2.4
Determination
of Alternative Structures. Sterling hereby agrees that
Roma and Roma Bank may at any time change the method of effecting the
combination; provided, however, that no such changes shall (i) alter or change
the amount or kind of the Merger Consideration, (ii) materially impede or delay
consummation of the transactions contemplated by this Agreement, or (iii)
adversely affect the tax treatment of Sterling’s shareholders as a result of
receiving the Merger Consideration or the tax treatment of either party pursuant
to this Agreement.
Section 2.5
Laws
of Escheat. If any of the consideration due or other
payments to be paid or delivered to the holders of Sterling Shares is not paid
or delivered within the time period specified by any applicable laws concerning
abandoned property, escheat or similar laws, and if such failure to pay or
deliver such consideration occurs or arises out of the fact that such property
is not claimed by the proper owner thereof, Roma or the Exchange Agent shall be
entitled to dispose of any such consideration or other payments in accordance
with applicable laws concerning abandoned property, escheat or similar
laws. Any other provision of this Agreement notwithstanding, none of
Sterling, Sterling Bank, Roma, Roma Bank, the Exchange Agent, nor any other
Person acting on behalf of any of them shall be liable to a holder of Sterling
Shares for any amount paid or property delivered in good faith to a public
official pursuant to and in accordance with any applicable abandoned property,
escheat or similar law.
Section 2.6 Adjustment to Merger
Consideration. In the event Sterling’s consolidated tangible
common equity capital as of the last day of the month immediately preceding the
month in which Sterling mails the proxy statement relating to the meeting of the
shareholders of Sterling at which the Merger is to be considered (the “Proxy
Statement”), calculated in accordance with GAAP but without giving effect to
severance costs and costs to terminate existing contracts resulting from the
transactions contemplated by this Agreement as set forth on Sterling Schedule
2.6 to the extent such expenses have been expensed during the period between
December 31, 2009 and the month-end prior to mailing of the Proxy Statement
(“Actual
6
Tangible
Equity”), is less than $13,400,000 (“Required Tangible Equity”), the Merger
Consideration shall be reduced by a dollar amount equal to the amount by which
the Required Tangible Equity amount exceeds the Actual Tangible Equity divided
by the number of Sterling Shares outstanding immediately prior to the Effective
Time of the Merger. In the event of any such reduction in the Merger
Consideration, the term “Merger Consideration” herein shall be deemed to refer
to such reduced dollar amount.
ARTICLE 3
REPRESENTATIONS
AND WARRANTIES OF STERLING AND STERLING BANK
Sterling
and Sterling Bank hereby represent and warrant to Roma and Roma Bank as follows
as of the date hereof and as of all times up to and including the Effective Time
of the Merger (except as otherwise provided):
Section
3.1 Corporate
Organization.
(a) Sterling
is a corporation duly organized, validly existing and in good standing under the
laws of the State of New Jersey. Sterling has the corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as such business is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets leased by it makes such licensing or qualification necessary, except
where the failure to be so licensed or qualified (or steps necessary to cure
such failure) would not have a Material Adverse Effect on Sterling on a
consolidated basis. Sterling is duly registered as a bank holding
company pursuant to the Bank Holding Company Act of 1956, as
amended. True and correct copies of the Certificate of Incorporation
and the Bylaws of Sterling, each as amended to the date hereof, have been
delivered to Roma.
(b) Sterling
Bank is a commercial bank duly organized, validly existing and in good standing
under the laws of the State of New Jersey. Sterling Bank has the
corporate power and authority to own or lease all of its respective properties
and assets and to carry on its business as such business is now being
conducted. True and correct copies of the Certificate of
Incorporation and the Bylaws of Sterling Bank, each as amended to the date
hereof, have been delivered to Roma.
(c) Each
direct and indirect Subsidiary of Sterling (other than Sterling Bank, a
“Sterling Subsidiary”) is a corporation, limited liability company, partnership,
trust or other business entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization. Each Sterling Subsidiary has the corporate or requisite
power or authority to own or lease all of its properties and assets and to carry
on its business as such business is now being conducted, and is duly licensed or
qualified to do business in all such places where the nature of the business
being conducted by each Sterling Subsidiary or the character or location of the
properties or assets owned or leased by each Sterling Subsidiary makes such
qualification necessary, except where the failure to be so licensed or qualified
(or steps necessary to cure such failure) would not have a Material Adverse
Effect on Sterling on a consolidated basis. A true and correct list
of all direct and indirect Sterling Subsidiaries is attached hereto as Sterling
Schedule 3.1(c). Such schedule details the
7
jurisdiction
of organization, type of entity, percentage ownership and a brief description of
all material activities conducted by such Sterling Subsidiary.
(d) Each
of Sterling, Sterling Bank and each Sterling Subsidiary has in effect all
material federal, state, local and foreign governmental, regulatory, securities
brokerage and other authorizations, permits and licenses necessary for it to own
or lease its properties and assets and to carry on its business as now
conducted.
(e) The
respective minute books of Sterling, Sterling Bank and each Sterling Subsidiary
contain complete and accurate records in all material respects of all meetings
and other corporate actions held or taken by their respective shareholders and
Boards of Directors (including all committees thereof).
(f) Sterling
Bank is a member in good standing of the Federal Home Loan Bank of New
York.
Section
3.2 Capitalization. (a) The
authorized capital stock of Sterling consists of 25,000,000 Sterling Shares, of
which 5,843,362 are issued and outstanding as of the date hereof (and of which
none are held in the treasury of Sterling), and 10,000,000 shares of preferred
stock with no par value, none of which are issued and outstanding as of the date
hereof. All of the issued and outstanding Sterling Shares have been
duly authorized, validly issued and all such shares are fully paid and
nonassessable. To the Knowledge of Sterling, except for the Support
Agreements, there are no agreements or understandings with respect to the voting
or disposition of any such shares. As of the date hereof, there are
no outstanding options, warrants, commitments, or other rights or instruments to
purchase or acquire any shares of capital stock of Sterling, or any securities
or rights convertible into or exchangeable for shares of capital stock of
Sterling, except for Sterling Options for the purchase of an aggregate of
566,638 Sterling Shares, which are described in Sterling Schedule 2.3, including
the name of the optionee, date of grant, expiration date and exercise
price. No bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which shareholders of Sterling may vote are
issued or outstanding.
(b) Except
for trust preferred securities issued by Sterling Banks Capital Trust I,
Sterling owns, directly, or indirectly, all of the capital stock of Sterling
Bank and the Sterling Subsidiaries, free and clear of any liens, security
interests, pledges, charges, encumbrances, agreements and restrictions of any
kind or nature. All of the outstanding shares of capital stock of
Sterling Bank and of each Sterling Subsidiary have been duly authorized and are
validly issued, fully paid and nonassessable. There are no
subscriptions, options, commitments, calls or other agreements outstanding with
respect to the capital stock of Sterling Bank or any Sterling
Subsidiary. Except for Sterling Bank and the Sterling Subsidiaries,
Sterling does not possess, directly or indirectly, any material equity interest
in any entity.
(c) To
Sterling’s Knowledge, except as set forth in Sterling Schedule 3.2(c), no Person
or “group” (as that term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) is the beneficial owner (as
defined in Section 13(d) of the Exchange Act) of 5% or more of the outstanding
Sterling Shares.
8
Section
3.3 Financial
Statements; Filings.
(a) Sterling
has previously delivered to Roma copies of the audited financial statements of
Sterling as of and for the years ended December 31, 2008 and December 31, 2007
and unaudited financial statements for the quarters ended March 31, 2009, June
30, 2009 and September 30, 2009, and Sterling shall deliver to Roma, as soon as
practicable following the preparation of additional financial statements for
each subsequent calendar quarter or year of Sterling, the additional financial
statements of Sterling as of and for such subsequent calendar quarter (or other
reporting period) or year (such financial statements, unless otherwise
indicated, being hereinafter referred to collectively as the “Financial
Statements of Sterling”).
(b) Sterling
Bank has previously delivered to Roma copies of its Consolidated Reports of
Condition and Income (“Call Reports”) as of and for each of the years ended
December 31, 2009, December 31, 2008 and December 31, 2007, and Sterling Bank
shall deliver to Roma, as soon as practicable following the preparation of
additional Call Reports for each subsequent calendar quarter or year, its Call
Reports as of and for such subsequent calendar quarter (or other reporting
period) or year (such Call Reports, unless otherwise indicated, being
hereinafter referred to collectively as the “Financial Regulatory Reports of
Sterling Bank”).
(c) Except as
set forth on Sterling Schedule 3.3, each of the Financial Statements of Sterling
and each of the Financial Regulatory Reports of Sterling Bank (including the
related notes, where applicable) have been or will be prepared in all material
respects in accordance with GAAP or regulatory accounting principles, whichever
is applicable, which principles have been or will be consistently applied during
the periods involved, except as otherwise noted therein, and the books and
records of Sterling and Sterling Bank have been, are being, and will be
maintained in all material respects in accordance with applicable legal and
accounting requirements and reflect only actual transactions. Except
as set forth on Sterling Schedule 3.3, each of the Financial Statements of
Sterling and each of the Financial Regulatory Reports of Sterling Bank
(including the related notes, where applicable) fairly present or will fairly
present the financial position of Sterling or Sterling Bank, as applicable, as
of the respective dates thereof and fairly present or will fairly present the
results of operations of Sterling or Sterling Bank, as applicable, for the
respective periods therein set forth.
(d) Sterling
has heretofore delivered or made available, or caused to be delivered or made
available, to Roma all reports and filings made or required to be made by
Sterling or Sterling Bank with the Regulatory Authorities since January 1, 2007,
and will from time to time hereafter furnish to Roma, simultaneously with the
filing of the same with the Regulatory Authorities, all such reports and filings
made after the date hereof with the Regulatory Authorities, including all
reports and filings made under the Written Agreement dated as of July 28, 2009
by and among Sterling, Sterling Bank, the Board of Governors of the Federal
Reserve System (the “FRB”) and the New Jersey Department of Banking and
Insurance (the “NJDOBI”). Except as set forth on Sterling Schedule
3.3, as of the respective dates of such reports and filings, all such reports
and filings did not and shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
9
(e) Since
December 31, 2008, none of Sterling, Sterling Bank or any Sterling Subsidiary
has incurred any obligation or liability (contingent or otherwise) that has or
might reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Sterling on a consolidated basis except obligations
and liabilities that are accrued or reserved against in (i) the Financial
Statements of Sterling, or reflected in the notes thereto, as such Financial
Statements of Sterling have been amended, restated or superseded by an amendment
to a Form 10-Q or 10-K of Sterling prior to the date of this
Agreement or (ii) the Financial Regulatory Reports of Sterling Bank, or
reflected in the notes thereto, as such Financial Regulatory Reports of Sterling
Bank have been amended, restated or superseded by an amended Call Report of
Sterling Bank prior to the date of this Agreement. Since December 31,
2008, none of Sterling, Sterling Bank or any Sterling Subsidiary has incurred or
paid any obligation or liability that would be material to Sterling and its
subsidiaries on a consolidated basis, except as may have been incurred or paid
in the ordinary course of business, consistent with past practices.
Section
3.4
Loan
Portfolio; Reserves. All evidences of indebtedness
reflected as assets in the Financial Statements of Sterling were (or will be, as
the case may be) as of such dates in all respects the binding obligations of the
respective obligors named therein in accordance with their respective terms, and
were not subject to any defenses, setoffs, or counterclaims, except as may be
provided by bankruptcy, insolvency or similar laws or by general principles of
equity. Except as set forth on Sterling Schedule 3.4, the allowances
for possible loan losses shown on the Financial Statements of Sterling and the
Financial Regulatory Reports of Sterling Bank as of December 31, 2009 were, and
the allowance for possible loan losses to be shown on the Financial Statements
of Sterling and the Financial Regulatory Reports of Sterling Bank as of any date
subsequent to the execution of this Agreement will be, as of such dates,
adequate to provide for possible losses, net of recoveries relating to loans
previously charged off, in respect of loans outstanding (including accrued
interest receivable) of Sterling Bank and other extensions of credit (including
letters of credit or commitments to make loans or extend credit).
Section
3.5 Certain
Loans and Related Matters. Except as set forth in
Sterling Schedule 3.5, as of February 28, 2010, none of Sterling, Sterling Bank
or any Sterling Subsidiary is a party to any written or oral: (i) loan
agreement, note or borrowing arrangement under the terms of which the obligor is
sixty (60) days delinquent in payment of principal or interest or, to the
Knowledge of Sterling and Sterling Bank, in default of any other material
provision; (ii) loan agreement, note or borrowing arrangement that has been
classified or, in the exercise of reasonable diligence by Sterling, Sterling
Bank, a Sterling Subsidiary or any Regulatory Authority, should have been
classified by any bank examiner (whether regulatory or internal) as
“substandard,” “doubtful,” “loss,” “other loans especially mentioned,” “other
assets especially mentioned,” “special mention,” “credit risk assets,”
“classified,” “criticized,” “watch list,” “concerned loans” or any comparable
classifications by such persons; (iii) loan agreement, note or borrowing
arrangement that is on nonaccrual status; (iv) loan agreement, note or borrowing
arrangement, including any loan guaranty, with (y) any director or executive
officer of Sterling, Sterling Bank or any Sterling Subsidiary or any person,
corporation or enterprise controlling, controlled by or under common control
with any of the foregoing or (z) or any five percent (5%) shareholder of
Sterling or, to the Knowledge of Sterling and Sterling Bank, any person,
corporation or enterprise controlling, controlled by or under common control
with such shareholder; or (v) loan agreement, note or borrowing arrangement in
violation of any law,
10
regulation
or rule applicable to Sterling, Sterling Bank or any Sterling Subsidiary
including, but not limited to, those promulgated, interpreted or enforced by any
Regulatory Authority, which such violation would be reasonably expected to have
a Material Adverse Effect on Sterling. To the Knowledge of Sterling,
as of the date of this Agreement, there are no additional items that would
be included on Sterling Schedule 3.5 if such Schedule 3.5 was prepared as
of the date of this Agreement rather than as of February 28, 2010.
Section
3.6 Authority;
No Violation.
(a) Sterling
and Sterling Bank have full corporate power and authority to execute and deliver
this Agreement and, subject to the approval of the shareholders of Sterling and
the receipt of the Consents of the Regulatory Authorities, to consummate the
transactions contemplated hereby. The Boards of Directors of Sterling
and Sterling Bank have duly and validly approved this Agreement and the
transactions contemplated hereby, have authorized the execution and delivery of
this Agreement, have directed that this Agreement and the transactions
contemplated hereby be submitted to Sterling’s shareholders for approval at a
meeting of such shareholders and, except for the adoption of such Agreement by
Sterling’s shareholders, no other corporate proceeding on the part of Sterling
or Sterling Bank is necessary to consummate the transactions so
contemplated. This Agreement (assuming due authorization, execution
and delivery by Roma and Roma Bank), constitutes a valid and binding obligation
of Sterling and Sterling Bank, and, subject to approval by the shareholders of
Sterling and receipt of the Consents of the Regulatory Authorities, will be
enforceable against Sterling and Sterling Bank in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, receivership or similar laws affecting
the enforcement of creditors’ rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be
brought.
(b) None of
(x) the execution and delivery of this Agreement by Sterling or Sterling Bank,
(y) the consummation by Sterling or Sterling Bank of the transactions
contemplated hereby, or (z) compliance by Sterling, Sterling Bank or any
Sterling Subsidiary with any of the terms or provisions hereof, will (i) violate
any provision of the Certificate of Incorporation or Bylaws of Sterling or
Sterling Bank or the organizational documents of any Sterling Subsidiary, (ii)
assuming that the Consents of the Regulatory Authorities and approvals referred
to herein are duly obtained, violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to Sterling,
Sterling Bank, a Sterling Subsidiary or any of their properties or assets, or
(iii) except as disclosed in Sterling Schedule 3.6(b), violate, conflict with,
result in a breach of any provisions of, constitute a default (or an event that,
with notice or lapse of time, or both, would constitute a default) under, result
in the termination of, accelerate the performance required by or result in the
creation of any lien, security interest, charge or other encumbrance upon any of
the respective properties or assets of Sterling, Sterling Bank or any Sterling
Subsidiary under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, permit, lease, agreement or other
instrument or obligation to which Sterling, Sterling Bank or any Sterling
Subsidiary is a party, or by which it or any of their properties or assets may
be bound or affected.
11
Section 3.7
Consents
and Approvals. Except for (i) the approval of the
shareholders of Sterling at a meeting of shareholders called for such purpose
pursuant to the Proxy Statement, (ii) the Consents of the Regulatory
Authorities, and (iii) as set forth in Sterling Schedule 3.7, no Consents of any
person are necessary in connection with the execution and delivery by Sterling
and Sterling Bank of this Agreement, and the consummation of the Merger and the
other transactions contemplated hereby.
Section
3.8 Broker’s
Fees. Except for Xxxxxxx Financial Group LLC
(“Xxxxxxx”), whose engagement letter is set forth in Sterling Schedule 3.8, none
of Sterling, Sterling Bank or any of its officers or directors has employed any
broker or finder or incurred any liability for any broker’s fees, commissions or
finder’s fees in connection with any of the transactions contemplated by this
Agreement.
Section
3.9 Absence
of Certain Changes or Events. Except as set forth in
Sterling Schedule 3.9, since December 31, 2008, there has not been (a) any
declaration, payment or setting aside of any dividend or distribution (whether
in cash, stock or property) in respect of Sterling Shares or (b) any change or
any event involving a prospective change in the financial condition of Sterling
and its subsidiaries, or a combination of any such change(s) and any such
event(s) that has had, or is reasonably likely to have, a Material Adverse
Effect on the financial condition of Sterling and its subsidiaries, including,
without limitation any change in the administration or supervisory standing or
rating of Sterling or Sterling Bank with any Regulatory Authority, and, except
as set forth on Sterling Schedule 3.9, no fact or condition exists as of the
date hereof which might reasonably be expected to cause any such event or change
in the future.
Section
3.10
Legal
Proceedings; Etc. None of Sterling, Sterling Bank or
any Sterling Subsidiary is a party to any, and there are no pending or, to the
Knowledge of Sterling or Sterling Bank, any threatened, judicial,
administrative, arbitral or other proceedings, claims (whether asserted or
unasserted), actions, causes of action or governmental investigations against
Sterling, Sterling Bank or any Sterling Subsidiary challenging the validity of
the transactions contemplated by this Agreement. Except as set forth
in Sterling Schedule 3.10, as of the date hereof, there is no proceeding, claim,
action or governmental investigation pending, or to the Knowledge of Sterling
and Sterling Bank threatened, against Sterling, Sterling Bank or any Sterling
Subsidiary and no judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or arbitrator is
outstanding against Sterling, Sterling Bank or any Sterling
Subsidiary. As of the date hereof, there is no default by Sterling,
Sterling Bank or any Sterling Subsidiary under any material contract or
agreement to which such entity is a party; and, except as set forth in Sterling
Schedule 3.10, none of Sterling, Sterling Bank or any Sterling Subsidiary is a
party to any agreement, order or memorandum in writing by or with any Regulatory
Authority restricting their respective operations, and none of Sterling,
Sterling Bank or any Sterling Subsidiary has been advised by any Regulatory
Authority that any such Regulatory Authority is contemplating issuing or
requesting the issuance of any such order or memorandum in the
future.
Section
3.11 Taxes
and Tax Returns.
(a) Sterling
has previously delivered or made available to Roma copies of the federal, state
and local income tax returns of Sterling, Sterling Bank and the Sterling
Subsidiaries
12
(hereinafter
Sterling, Sterling Bank and the Sterling Subsidiaries are sometimes referred to
collectively as the “Sterling Group”) for the years 2008, 2007 and 2006 and all
schedules and exhibits thereto, and none of Sterling, Sterling Bank
or any Sterling Subsidiary has received any written notice that such returns
have been examined by the Internal Revenue Service or any other taxing
authority. Sterling, Sterling Bank and the Sterling Subsidiaries have
duly filed (taking into account any valid extensions of time for filing) and,
with respect to tax returns due (taking into account any valid extensions of
time for filing) between the date hereof and the Effective Time of the Merger,
will timely file (taking into account any valid extensions of time for filing)
in correct form all federal, state and local information returns and tax returns
required to be filed by Sterling, Sterling Bank or any Sterling Subsidiary, and
Sterling, Sterling Bank and each Sterling Subsidiary have duly paid or made
adequate provisions for the payment of all taxes and other governmental charges
relating to taxes that are due and owing by Sterling, Sterling Bank or any
Sterling Subsidiary to any federal, state or local taxing authorities, whether
or not reflected in such returns (including, without limitation, those due and
owing in respect of the properties, income, business, capital stock, deposits,
franchises, licenses, sales and payrolls of Sterling, Sterling Bank or any
Sterling Subsidiary), other than taxes and other charges that (i) are being
contested in good faith or (ii) have not been finally determined. All
taxes not yet due and payable by, or with respect to the income, assets,
properties, activities or operations of, the Sterling Group, (i) did not, as of
December 31, 2009, exceed the reserve for such tax liabilities (excluding
deferred taxes established to reflect timing differences between book and tax
income) set forth on the face of the Financial Statements of Sterling, and (ii)
do not exceed that reserve as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice in filing tax
returns relating to such taxes. None of Sterling, Sterling Bank or
any Sterling Subsidiary has ever been a member of any consolidated, combined or
unitary group of corporations (other than a group of which Sterling was the
parent) for which it could be liable for taxes of any other person pursuant to
Treasury Regulations Section 1.1502-6 (or any similar provision of state, local
or foreign tax law).
(b) None of
Sterling, Sterling Bank or any Sterling Subsidiary has granted any waiver of any
statute of limitations with respect to, or any extension of a period for the
assessment of, any taxes, or is subject to a power of attorney with respect to
any tax matters that would have continuing effect after the Closing
Date.
(c) Except as
set forth on Sterling Schedule 3.11(c), none of Sterling, Sterling Bank or any
Sterling Subsidiary has made any payment, is obligated to make any payment or is
a party to any contract, agreement or other arrangement that could obligate it
to make any payment that would be exceed the amounts that are eligible to be a
deduction under Section 280G or 162(m) of the Code. The Employment
Agreement entered
into by Sterling Bank with Xxxxxx X. Xxxx has been amended as necessary prior to
the execution of this Agreement, effective as of the Effective Time of the
Merger, as set forth in the Addendum to Employment Agreement attached as Exhibit
D.
(d) The
amount of Sterling’s taxable income for the period ended December 31, 2009, that
was eligible to be offset by “pre-change losses” was not subject to the “Section
382 limitation” within the meaning of and as provided in Section 382(a) of the
Code.
13
(e) (i)
Proper and accurate amounts have been withheld by Sterling, Sterling Bank and
the Sterling Subsidiaries from their employees and others for all prior periods
in compliance in all material respects with the tax withholding provisions of
all applicable federal, state and local laws and regulations, and proper due
diligence steps have been taken in connection with back-up withholding; (ii)
federal, state and local returns have been filed by Sterling, Sterling Bank and
the Sterling Subsidiaries for all prior periods for which returns were due with
respect to withholding, Social Security and unemployment taxes or charges due to
any federal, state or local taxing authority; and (iii) the amounts shown on
such returns to be due and payable have been paid in full or adequate provision
therefor has been included by Sterling in the Financial Statements of
Sterling.
(f) None of
Sterling, Sterling Bank or any Sterling Subsidiary has received any written
notice that an audit or examination of any of its taxes or tax returns is
pending.
(g) None
of Sterling, Sterling Bank or any Sterling Subsidiary is required to include in
income any adjustment pursuant to Section 481(a) of the Code, no such adjustment
has been proposed by the Internal Revenue Service and no pending request for
permission to change any accounting method has been submitted by Sterling,
Sterling Bank or any Sterling Subsidiary.
Section
3.11 Employee
Benefit Plans.
(a) None of
Sterling, Sterling Bank or any Sterling Subsidiary maintains any “employee
benefit plan,” as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or any other benefit plan or program
maintained for employees or directors of Sterling, Sterling Bank or any Sterling
Subsidiary, except as described in Sterling Schedule 3.12(a) (the “Employee
Benefit Plans”). Sterling has, with respect to each such plan,
delivered to Roma true and complete copies of: (i) all plan texts and agreements
and related trust agreements or annuity contracts and any amendments thereto;
(ii) all summary plan descriptions and material employee communications; (iii)
the Form 5500 filed in each of the most recent three plan years (including all
schedules thereto and the opinions of independent accountants); (iv) the most
recent actuarial valuation (if any); (v) the most recent annual and periodic
accounting of plan assets; (vi) if the plan is intended to qualify under Section
401(a) of the Code, the most recent determination letter received from the
Internal Revenue Service or opinion letter issued by the Internal Revenue
Service with respect to a prototype plan; and (vii) all material communications
with any governmental entity or agency (including, without limitation, the
Department of Labor, Internal Revenue Service and the Pension Benefit Guaranty
Corporation (“PBGC”)).
(b) No
Employee Benefit Plan is a “defined benefit plan” as such term is defined at
Section 3(35) of ERISA. None of Sterling, Sterling Bank or any
Sterling Subsidiary (or any pension plan maintained by any of them) has incurred
any liability to the PBGC or the Internal Revenue Service with respect to any
pension plan qualified under Section 401 of the Code, except liabilities to the
PBGC pursuant to Section 4007 of ERISA, all of which have been fully
paid. No reportable event under Section 4043(b) of ERISA (including
events waived by PBGC regulation) has occurred with respect to any such pension
plan.
14
(c) None of
Sterling, Sterling Bank or any Sterling Subsidiary has incurred any liability
under Section 4201 of ERISA for a complete or partial withdrawal from, or agreed
to participate in, any multi-employer plan as such term is defined in Section
3(37) of ERISA.
(d) All
Employee Benefit Plans have been operated and administered in all material
respects in accordance with their terms and all applicable law, including but
not limited to, ERISA, the Code, COBRA, HIPAA and any applicable, similar state
law and all requisite filings, disclosures and notices required by law have been
made or given. None of Sterling, Sterling Bank or any Sterling
Subsidiary has any material liability under any such plan that is not reflected
in the Financial Statements of Sterling or the Financial Regulatory Reports of
Sterling Bank. None of Sterling, Sterling Bank, any Sterling
Subsidiary, any Employee Benefit Plan or any employee, administrator or agent
thereof, is or has been in material violation of any applicable transaction code
set rules under HIPAA §§ 1172-1174 or the HIPAA privacy rules under 45 CFR Part
160 and subparts A and E of Part 164. No penalties have been imposed
on Sterling, Sterling Bank, any Sterling Subsidiary, any Employee Benefit Plan,
or any employee, administrator or agent thereof, under HIPAA § 1176 or §
1177.
For
purposes of this Agreement, “COBRA” means the provision of Section 4980B of the
Code and the regulations thereunder, and Part 6 of Subtitle B of Title I of
ERISA and any regulations thereunder, and “HIPAA” means the provisions of the
Code and ERISA as enacted by the Health Insurance Portability and Accountability
Act of 1996.
(e) No
prohibited transaction (which shall mean any transaction prohibited by Section
406 of ERISA and not exempt under Section 408 of ERISA) has occurred with
respect to any Employee Benefit Plan that would result in the imposition,
directly or indirectly, of an excise tax under Section 4975 of the Code or a
civil penalty under Section 502(i) of ERISA; and no actions have occurred that
could result in the imposition of a penalty under any section or provision of
ERISA.
(f) Except as
set forth in Sterling Schedule 3.12(f), neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
directly or indirectly (i) result in any payment or obligation (including,
without limitation, severance, bonus, deferred compensation, retirement,
unemployment compensation, golden parachute or otherwise) becoming due to any
director or any officer or employee of Sterling, Sterling Bank or any Sterling
Subsidiary under any Employee Benefit Plan or otherwise, (ii) increase any
benefits or obligations otherwise payable under any benefit
plan, (iii) result in any acceleration of the time of payment or
vesting of any such benefits or obligations; or (iv) result in or have the
potential to result in a payment that will be deemed an “excess parachute
payment” within the meaning of such term under Section 280G of the Code becoming
due.
(g) No
Employee Benefit Plan is a multiemployer plan as defined in Section 414(f) of
the Code or Section 3(37) or 4001(a)(3) of ERISA. None of Sterling,
Sterling Bank or any Sterling Subsidiary has ever been a party to or participant
in a multiemployer plan.
(h) There are
no actions, liens, suits or claims pending or, to the Knowledge of Sterling or
Sterling Bank, threatened (other than routine claims for benefits) with respect
to any Employee Benefit Plan or against the assets of any Employee Benefit
Plan. No assets of
15
Sterling,
Sterling Bank or the Sterling Subsidiaries are subject to any lien under Section
302(f) of ERISA or Section 412(n) of the Code.
(i) Each
Employee Benefit Plan that is intended to qualify under Section 401(a) or 403(a)
of the Code so qualifies and its related trust is exempt from taxation under
Section 501(a) of the Code. To the Knowledge of Sterling and Sterling
Bank, no event has occurred or circumstance exists that will or could give rise
to a disqualification or loss of tax-exempt status of any such plan or
trust.
(j) No
Employee Benefit Plan is a multiple employer plan within the meaning of Section
413(c) of the Code or Section 4063, 4064 or 4066 of ERISA. No
Employee Benefit Plan is a multiple employer welfare arrangement as defined in
Section 3(40) of ERISA.
(k) Each
employee pension benefit plan, as defined in Section 3(2) of ERISA, that is not
qualified under Section 401(a) or 403(a) of the Code is exempt from Part 2, 3
and 4 of Title I of ERISA as an unfunded plan that is maintained primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees, pursuant to Section 201(2), 301(a)(3) and
401(a)(1) of ERISA. Except as set forth on Sterling Schedule 3.12(f),
no assets of Sterling, Sterling Bank or any Sterling Subsidiary are allocated to
or held in a grantor trust or “rabbi trust” or similar funding
vehicle.
(l) Except as
set forth on Sterling Schedule 3.12(l), (i) none of Sterling, Sterling Bank or
any Sterling Subsidiary is presently providing for or is obligated under any
contract or arrangement or otherwise to provide for retiree or other
post-service pension, medical, disability, life insurance or other compensation
or benefits to any current or former employee, officer, director of Sterling or
any other person, and (ii) no Employee Benefit Plan provides benefits to any
current or former employee of Sterling, Sterling Bank or any Sterling Subsidiary
following the retirement or other termination of service (other than coverage
mandated by COBRA, the cost of which is fully paid by the current or former
employee or his or her dependents). Any such plan may be amended or
terminated at any time by unilateral action of Sterling, Sterling Bank or a
Sterling Subsidiary as applicable.
(m) With
respect to each Employee Benefit Plan, there are no funded benefit obligations
for which contributions have not been made or properly accrued and there are no
unfunded benefit obligations that have not been accounted for by reserves or
otherwise properly footnoted in accordance with GAAP on the Financial Statements
of Sterling.
(n) Except
as set forth in Sterling Schedule 3.12(n), none of Sterling, Sterling Bank or
any Sterling Subsidiary (i) has, to the Knowledge of Sterling, taken any
action, or has failed to take any action, that has resulted or could result in
the interest and tax penalties specified in Section 409A of the Code being
owed by any employee, former employee, director, former director or beneficiary
or (ii) has agreed to reimburse or indemnify any employee, former employee,
director, former director or beneficiary for any of the interest and tax
penalties specified in Section 409A of the Code that may be currently due
or triggered in the future.
16
(a) Sterling,
Sterling Bank and the Sterling Subsidiaries have good title, and as to owned
real property have marketable title in fee simple absolute, to all assets and
properties, real or personal, tangible or intangible, reflected as owned on the
Financial Statements of Sterling or the Financial Regulatory Reports of Sterling
Bank or acquired subsequent thereto (except to the extent that such assets and
properties have been disposed of for fair value, collected or written off in the
ordinary course of business since September 30, 2009), free and clear of all
liens, encumbrances, mortgages, security interests, restrictions, pledges or
claims, except for (i) those liens, encumbrances, mortgages, security interests,
restrictions, pledges or claims reflected in the Financial Statements of
Sterling and the Financial Regulatory Reports of Sterling Bank or incurred in
the ordinary course of business after September 30, 2009, (ii) statutory liens
for amounts not yet delinquent or that are being contested in good faith, and
(iii) liens, encumbrances, mortgages, security interests, pledges, claims and
title imperfections that are not in the aggregate material to Sterling and its
subsidiaries on a consolidated basis.
(b) All
agreements pursuant to which Sterling, Sterling Bank or any Sterling Subsidiary
leases, subleases or licenses material real or material personal properties from
others are valid, binding and enforceable in accordance with their respective
terms, and there is not, under any of such leases or licenses, any existing
default or event of default, or any event that with notice or lapse of time, or
both, would constitute a default or force majeure, or provide the basis for any
other claim of excusable delay or nonperformance, except for defaults that
individually or in the aggregate would not have a Material Adverse Effect
on Sterling and its subsidiaries on a consolidated
basis. Sterling, Sterling Bank and the Sterling Subsidiaries have all
right, title and interest as a lessee under the terms of each lease or sublease,
free and clear of all liens, claims or encumbrances (other than the rights of
the lessor), and as of the Effective Time of the Merger, and, except as set
forth in Sterling Schedule 3.13(b), Roma or one of its subsidiaries shall have
the right to assume each lease or sublease pursuant to this Agreement and by
operation of law.
(c) All of
the buildings, structures and fixtures owned, leased or subleased by Sterling,
Sterling Bank or any Sterling Subsidiary are in good operating condition and
repair, subject only to ordinary wear and tear and/or minor defects that do not
interfere with the continued use thereof in the conduct of normal
operations. All of the material personal properties owned, leased or
subleased by Sterling, Sterling Bank or any Sterling Subsidiary are in good
operating condition and repair, subject only to ordinary wear and tear and/or
minor defects that do not interfere with the continued use thereof in the
conduct of normal operations.
Section
3.14 Real
Estate.
(a) Sterling
Schedule 3.14(a) identifies each parcel of real estate or interest therein
owned, leased or subleased by Sterling, Sterling Bank or any Sterling Subsidiary
or in which Sterling, Sterling Bank or any Sterling Subsidiary has any ownership
or leasehold interest. True and correct copies of all such leases
have been previously provided to Roma and all such agreements are in full force
and effect on the date hereof. Except as set forth on Sterling
Schedule 3.14(a), there are no pending agreements to sell any of the parcels of
real estate, or interests therein, owned by Sterling, Sterling Bank or any
Sterling Subsidiary,
17
(b) Sterling
Schedule 3.14(b) lists or otherwise describes each and every written or oral
lease or sublease, together with the current name, address and telephone number
of the landlord or sublandlord and the landlord’s property manager (if any),
under which Sterling, Sterling Bank or any Sterling Subsidiary is the lessee of
any real property and that relates in any manner to the operation of the
businesses of Sterling, Sterling Bank or any Sterling
Subsidiary. Sterling Schedule 3.14(b) also lists any such lease that
requires the consent of the lessor or its agent resulting from the Merger by
virtue of the terms of such lease, identifying the section of such lease that
contains such restriction or prohibition.
(c) Sterling,
Sterling Bank and each Sterling Subsidiary are in compliance in all material
respects with each law, regulation or ordinance relating to the ownership or use
of the real estate and real estate interests described in Sterling Schedules
3.14(a) and 3.14(b) including, but not limited to any law, regulation or
ordinance relating to zoning, building, occupancy, environmental or comparable
matter.
(d) As to
each parcel of real property owned or used by Sterling, Sterling Bank or any
Sterling Subsidiary, none of Sterling, Sterling Bank or any Sterling Subsidiary
has received notice of any pending, and to the Knowledge of Sterling and
Sterling Bank there are no threatened, condemnation proceedings, litigation
proceedings or mechanic’s or materialmen’s liens.
Section
3.15 Environmental
Matters.
(a) Except as
set forth in Sterling Schedule 3.15(a), each of Sterling, Sterling Bank or any
Sterling Subsidiary and, to the Knowledge of Sterling, the Participation
Facilities (as defined below) and the Loan Properties (as defined below), are in
material compliance, and there are no present circumstances that would
reasonably be expected to prevent or interfere with the continuation of such
material compliance with all applicable Environmental Laws (as defined in
Section 11.1).
(b) There is
no litigation pending or, to the Knowledge of Sterling or Sterling Bank,
threatened before any court, governmental agency or board or other forum in
which Sterling, Sterling Bank, any Sterling Subsidiary, or any Participation
Facility has been or, with respect to threatened litigation, may be, named as
defendant (i) for alleged noncompliance (including by any predecessor), with
respect to any Environmental Law or (ii) relating to the release into the
environment of any Hazardous Material (as defined in Section 11.1), whether or
not occurring at, on or involving a site owned, leased or operated by Sterling,
Sterling Bank, any Sterling Subsidiary or any Participation Facility for which
Sterling, Sterling Bank or any Sterling Subsidiary would have any
liability.
(c) There is
no pending, or to the Knowledge of Sterling and Sterling Bank or any Sterling
Subsidiary, any threatened litigation naming Sterling, Sterling Bank or any
Sterling Subsidiary as a defendant or potentially responsible party, and, to the
Knowledge of Sterling, Sterling Bank or any Sterling Subsidiary, there is no
litigation pending or threatened before any court, governmental agency or board
or other forum in which any Loan Property has been named as a defendant or
potentially responsible party (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release into the
environment of
18
any
Hazardous Material, whether or not occurring at, on or involving a Loan Property
for which Sterling, Sterling Bank or any Sterling Subsidiary would have any
liability.
(d) To the
Knowledge of Sterling or Sterling Bank, there is no reasonable basis for any
litigation of a type described in Section 3.15(b) and Section 3.15(c) of this
Agreement for which Sterling, Sterling Bank or any Sterling Subsidiary would
have any liability.
(e) During
the period of (i) ownership or operation by Sterling, Sterling Bank or any
Sterling Subsidiary of any of its current properties, (ii) participation by
Sterling, Sterling Bank or any Sterling Subsidiary in the management of any
Participation Facility, or (iii) holding by Sterling, Sterling Bank or any
Sterling Subsidiary of a security interest in any Loan Property, there has been
no contamination by or releases of Hazardous Material in, on, under or affecting
such properties for which Sterling, Sterling Bank or any Sterling Subsidiary
would have any liability.
(f) Prior to
the period of (i) ownership or operation by Sterling, Sterling Bank or any
Sterling Subsidiary of any of its current properties, (ii) participation by
Sterling, Sterling Bank or any Sterling Subsidiary in the management of any
Participation Facility, or (iii) holding by Sterling, Sterling Bank or any
Sterling Subsidiary of a security interest in any Loan Property, to the
Knowledge of Sterling or Sterling Bank, there were no contamination by or
releases of Hazardous Material or oil in, on, under or materially affecting any
such property, Participation Facility or Loan Property that have not been
remediated in accordance with all applicable Environmental Laws for which
Sterling, Sterling Bank or any Sterling Subsidiary would have any
liability.
(g) There are
no underground storage tanks on, in or under any properties owned or operated by
Sterling, Sterling Bank, any Sterling Subsidiary or, to the Knowledge of
Sterling and Sterling Bank, any Participation Facility and no underground
storage tanks have been closed or removed from any properties owned or operated
by Sterling, Sterling Bank, any Sterling Subsidiary or, to the Knowledge of
Sterling and Sterling Bank, any Participation Facility except in material
compliance with Environmental Law.
Section
3.16 Commitments
and Contracts.
(a) Except
for this Agreement and as set forth in Sterling Schedule 3.16(a), none of
Sterling, Sterling Bank or any Sterling Subsidiary is a party or subject to any
of the following (whether written or oral, express or implied):
(i)
|
Any
employment, severance or consulting contract or understanding (including
any understandings or obligations with respect to severance or termination
pay liabilities or fringe benefits) with any present or former officer,
director or employee, including in any such person’s capacity as a
consultant (other than those which either are terminable at will without
any further amount being payable thereunder or as a result of such
termination by Sterling, Sterling Bank or a Sterling
Subsidiary);
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(ii)
|
Any
labor contract or agreement with any labor
union;
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19
(iii)
|
Any
contract covenants that limit the ability of Sterling, Sterling Bank or
any Sterling Subsidiary to compete in any line of business or that involve
any restriction of the geographical area in which Sterling, Sterling Bank
or any Sterling Subsidiary may carry on its businesses (other than as may
be required by law or applicable regulatory
authorities);
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(iv)
|
Any
lease (other than real estate leases described on Sterling Schedule
3.14(b)) or other agreements or contracts with annual payments aggregating
$50,000 or more;
|
(v)
|
Any
instrument evidencing or related to borrowed money in respect of which
Sterling, Sterling Bank or any Sterling Subsidiary is obligated to any
party, other than deposits, Federal Home Loan Bank (“FHLB”) advances or
securities sold under agreement to
repurchase;
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(vi)
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Any
contract not terminable without cause within 60 day’s notice or less
without penalty or that obligates
Sterling,
|
|
Sterling
Bank or any Sterling Subsidiary for the payment of more than $10,000
annually (collectively, “Contracts”) over its remaining term;
or
|
(vii)
|
Any
other contract or agreement that would be required to be disclosed in
reports filed by Sterling with the Securities and Exchange Commission
(“SEC”) or Sterling Bank with the NJDOBI, the FRB or the Federal Deposit
Insurance Corporation (“FDIC”) and that has not been so
disclosed.
|
(b) Except as
set forth in Sterling Schedule 3.16(b), there is not, under any agreement,
lease, license or contract not terminable without cause within 60 days’ notice
or less without penalty or that obligates Sterling, Sterling Bank or any
Sterling Subsidiary for the payment of $10,000 annually or over its remaining
term to which Sterling, Sterling Bank a Sterling Subsidiary is a party, any
existing default or event of default, or any event that, with notice or lapse of
time, or both, would constitute a default or force majeure, or provide the basis
for any other claim of excusable delay or non-performance.
(c) Except as
set forth on Sterling Schedule 3.16(c), (i) neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby will
result in termination of any Contracts or modification or acceleration of any of
the terms of such Contracts; and (ii) no consents are required to be obtained
and no notices are required to be given in order for the Contracts to remain
effective, without any modification or acceleration of any of the terms thereof,
following the consummation of the transactions contemplated by this
Agreement.
(d) Sterling
Schedule 3.16(d) lists the deadlines for extensions or terminations of any
licenses or Contracts (including specifically real property leases and data
processing agreements) to which Sterling, Sterling Bank or any Sterling
Subsidiary is a party.
20
Section
3.17
Regulatory
Matters. None of Sterling, Sterling Bank or any
Sterling Subsidiary has taken or agreed to take any action, and neither Sterling
nor Sterling Bank has any Knowledge of any fact or has agreed to any
circumstance that would materially impede or delay receipt of any Consents of
any Regulatory Authorities referred to in this Agreement, including matters
relating to the Community Reinvestment Act or the Bank Secrecy Act.
Section
3.18 Antitakeover
Provisions. Sterling and Sterling Bank have taken all
actions required to exempt Sterling, Sterling Bank, this Agreement and the
Merger from any provisions of an antitakeover nature contained in the
organizational documents of Sterling or Sterling Bank and the provisions of any
federal or state “antitakeover,” “fair price,” “moratorium,” “control share
acquisition” or similar laws or regulations.
Section
3.19 Insurance. Sterling,
Sterling Bank and the Sterling Subsidiaries are presently insured as set forth
on Sterling Schedule 3.19, and during each of the past three calendar years have
been insured, for such amounts against such risks as companies or institutions
engaged in a similar business would, in accordance with good business practice,
customarily be insured. The policies of fire, theft, liability and
other insurance maintained with respect to the assets or businesses of Sterling,
Sterling Bank and the Sterling Subsidiaries provide adequate coverage against
loss, and the fidelity bonds in effect as to which Sterling is named an insured
are sufficient for their purpose. Such policies of insurance are
listed and described in Sterling Schedule 3.19. None of Sterling,
Sterling Bank or any Sterling Subsidiary has received any notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with respect to
such policies of insurance will be substantially increased. Except as
disclosed in Sterling Schedule 3.19, there are no material claims pending under
such policies of insurance and no notices have been given by Sterling, Sterling
Bank or any Sterling Subsidiary under such policies. Within the last
three years each of Sterling, Sterling Bank and the Sterling Subsidiaries have
received each type of insurance coverage for which it has applied and during
such period has not been denied indemnification for any material claims
submitted under any of its insurance policies.
Section
3.20 Labor.
(a) No work
stoppage involving Sterling, Sterling Bank or any Sterling Subsidiary is pending
as of the date hereof or, to the Knowledge of Sterling or Sterling Bank,
threatened. None of Sterling, Sterling Bank or any Sterling
Subsidiary is involved in, or, to the Knowledge of Sterling or Sterling Bank,
threatened with or affected by, any proceeding asserting that Sterling, Sterling
Bank or any Sterling Subsidiary has committed an unfair labor practice or any
labor dispute, arbitration, lawsuit or administrative proceeding that might
reasonably be expected to have a Material Adverse Effect on Sterling and its
subsidiaries on a consolidated basis. No union represents or, to the
Knowledge of Sterling or Sterling Bank, claims to represent any employees of
Sterling, Sterling Bank or any Sterling Subsidiary, and, to the Knowledge of
Sterling or Sterling Bank, no labor union is attempting to organize employees of
Sterling, Sterling
Bank or any Sterling Subsidiary.
21
Schedule
3.16(a) hereto, no employee of Sterling, Sterling Bank any Sterling Subsidiary
has any contractual right to continued employment by such entity.
(c) Sterling,
Sterling Bank and each Sterling Subsidiary are in material compliance with all
applicable laws and regulations relating to employment or the workplace,
including, without limitation, provisions relating to wages, hours, collective
bargaining, safety and health, work authorization, equal employment opportunity,
immigration and the withholding of income taxes, unemployment compensation,
workers compensation, employee privacy and right to know and social security
contributions.
(d) Except as
set forth on Sterling Schedule 3.20(d) hereto, there has not been, there is not
presently pending or existing and, to the Knowledge of Sterling or any of its
subsidiaries, there is not threatened any proceeding against or affecting
Sterling, Sterling Bank or any Sterling Subsidiary relating to the alleged
violation of any legal requirement pertaining to labor relations or employment
matters, including any charge or complaint filed by an employee or union with
the National Labor Relations Board, the Equal Employment Opportunity Commission
or any comparable governmental body, organizational activity, or other labor or
employment dispute against or affecting Sterling, Sterling Bank or any Sterling
Subsidiary.
Section
3.21 Compliance
with Laws. Except for any noncompliance that has been
cured prior to the date hereof or as disclosed in Sterling Schedule 3.21,
Sterling, Sterling Bank and each Sterling Subsidiary have materially complied
with all applicable federal, foreign, state and local laws, rules, ordinances,
judgments, regulations and orders applicable to them, their properties, assets,
deposits, business, conduct of business and relationship with their employees,
including, without limitation, the Xxxxxxxx-Xxxxx Act of 2002, the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), the Bank Secrecy Act,
the Equal Credit Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act of 1977, the Home Mortgage Disclosure Act, and all other
applicable fair lending laws and other laws relating to discriminatory business
practices and none of Sterling, Sterling Bank or any Sterling Subsidiary has
received any written notice to the contrary that is currently
outstanding. Except as disclosed in Sterling Schedule 3.21, none of
Sterling, Sterling Bank or any Sterling Subsidiary:
(a) is in
violation of any laws, orders or permits applicable to its business or the
employees or agents or representatives conducting its business (other than where
such violation will not, alone or in the aggregate, have a Material Adverse
Effect on Sterling and its subsidiaries on a consolidated basis);
(b) has
received a notification or communication from any agency or department of any
federal, state or local governmental authority or any Regulatory Authority or
the staff thereof (i) asserting that it is not in compliance with any laws or
orders that such governmental authority or Regulatory Authority enforces (other
than where such non-compliance will not, alone or in the aggregate, have a
Material Adverse Effect on Sterling and its subsidiaries on a consolidated
basis), (ii) threatening to revoke any permit or license other than licenses or
permits the revocation of which will not, alone or in the aggregate, have a
Material Adverse Effect on Sterling and its subsidiaries on a consolidated
basis, (iii) requiring it to enter into any cease and desist order, formal
agreement, commitment or memorandum of understanding, or to
22
adopt any
resolutions or similar undertakings, or (iv) directing, restricting or limiting,
or purporting to direct, restrict or limit in any material manner, its
operations, including, without limitation, any restrictions on the payment of
dividends, or that in any manner relates to such entity’s capital adequacy,
credit policies, management or business (other than regulatory restrictions
generally applicable to all similarly situated bank holding companies and their
subsidiary banks); or
(c) is
aware of, has been advised of, or has any reason to believe that any facts or
circumstances exist that would cause it: (i) to be deemed to be
operating in violation in any material respect of the federal Bank Secrecy Act,
as amended, and its implementing regulations (31 C.F.R. Part 103), the USA
PATRIOT Act, and the regulations promulgated thereunder, any order issued with
respect to anti-money laundering by the U.S. Department of the Treasury’s Office
of Foreign Assets Control, or any other applicable anti-money laundering
statute, rule or regulation; or (ii) to be deemed not to be in satisfactory
compliance in any material respect with the applicable privacy of customer
information requirements contained in any federal and state privacy laws and
regulations, including without limitation, in Title V of the Xxxxx-Xxxxx-Xxxxxx
Act of 1999 and regulations promulgated thereunder, as well as the provisions of
the information security program adopted by Sterling Bank pursuant to Appendix B
to 12 C.F.R. Part 364. Furthermore, the Board of Directors of
Sterling Bank has adopted and Sterling and Sterling Bank have implemented an
anti-money laundering program that contains adequate and appropriate customer
identification verification procedures that materially comply with Section 326
of the USA PATRIOT Act and such anti-money laundering program meets the
requirements in all material respects of Section 352 of the USA PATRIOT Act and
the regulations thereunder.
Section
3.22 Transactions
with Management. Except for (a) deposits, all of which
are on terms and conditions comparable to those made available to other
customers of Sterling Bank at the time such deposits were entered into, (b) the
loans listed on Sterling Schedule 3.5 or arm’s length loans to employees entered
into in the ordinary course of business, (c) compensation arrangements or
obligations under employee benefit plans of Sterling, Sterling Bank or a
Sterling Subsidiary set forth in Sterling Schedule 3.12(a), (d) any loans or
deposit agreements entered into in the ordinary course with customers of
Sterling Bank, and (e) items set forth on Sterling Schedule 3.22, there are no
contracts with or commitments to directors, officers or employees involving the
expenditure of more than $10,000 as to any one individual, including, with
respect to any business directly or indirectly controlled by any such person, or
$10,000 for all such contracts for commitments in the aggregate for any such
individuals No loan or credit accommodation to any Affiliate of
Sterling, Sterling Bank or any Sterling Subsidiary is presently in default or,
during the three-year period prior to the date of this Agreement, has been in
default or has been restructured, modified or extended (with respect to
extensions, not in the ordinary course of business) except for rate
modifications pursuant to its loan modification policy that is applicable to all
Persons. Sterling Bank has not been notified that principal and
interest with respect to any such loan or other credit accommodation will not
be
paid when due or that the loan grade classification accorded such loan or credit
accommodation by Sterling Bank is inappropriate.
23
contract
or agreement, or any other contract or agreement not included in Financial
Statements of Sterling that is a financial derivative contract (including
various combinations thereof).
Section
3.24 Deposits. Except
as set forth on Sterling Schedule 3.24, none of the deposits of Sterling Bank
are “brokered” deposits as such term is defined in the Rules and Regulations of
the FDIC or are subject to any encumbrance, legal restraint or other legal
process (other than garnishments, pledges, set off rights, escrow limitations
and similar actions taken in the ordinary course of business), and, except as
set forth on Sterling Schedule 3.24, no portion of such deposits represents a
deposit of any Affiliate of Sterling, Sterling Bank or any Sterling
Subsidiary.
Section
3.25 Accounting
Controls; Disclosure Controls.
(a) Sterling,
Sterling Bank and the Sterling Subsidiaries have devised and maintained systems
of internal accounting control sufficient to provide reasonable assurances that:
(i) all material transactions are executed in accordance with general or
specific authorization of the Boards of Directors and the duly authorized
executive officers of Sterling, Sterling Bank and the Sterling Subsidiaries;
(ii) all material transactions are recorded as necessary to permit the
preparation of financial statements in conformity with GAAP consistently applied
with respect to institutions such as Sterling, Sterling Bank and the Sterling
Subsidiaries or any other criteria applicable to such financial statements, and
to maintain proper accountability for items therein; (iii) access to the
material properties and assets of Sterling, Sterling Bank and the Sterling
Subsidiaries is permitted only in accordance with general or specific
authorization of the Boards of Directors and the duly authorized executive
officers of Sterling, Sterling Bank and the Sterling Subsidiaries; and (iv) the
recorded accountability for items is compared with the actual levels at
reasonable intervals and appropriate actions taken with respect to any
differences.
(b) Sterling
has in place “disclosure controls and procedures” as defined in Rules 13a-15(e)
and 15d-15(e) of the Exchange Act to allow Sterling’s management to make timely
decisions regarding required disclosures and to make the certifications of the
Chief Executive Officer and Chief Financial Officer of Sterling required under
the Exchange Act.
(c) None of
the records, systems, controls, data or information of Sterling, Sterling Bank
or any Sterling Subsidiary are recorded, stored, maintained, operated or
otherwise wholly or partly dependent on or held by any means (including any
electronic, mechanical or photographic process, whether computerized or not)
that (including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of it or its subsidiaries or accountants
except as would not reasonably by expected to have a materially adverse effect
on the system of internal accounting controls described in the next
sentence. Sterling has designed and maintains a system of internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act) sufficient to provide reasonable assurance concerning the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP, including reasonable assurance
that (i) transactions are executed in accordance with management’s general or
specific authorizations and recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability, (ii) access to assets is permitted only in accordance with
management’s general or
24
specific
authorizations, and (iii) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken
with respect to any difference.
(d) No
personal loan or other extension of credit by Sterling Bank or any Sterling
Subsidiary to any of the executive officers or directors of Sterling, Sterling
Bank or any Sterling Subsidiary has been made or modified in violation of
Section 13 of the Exchange Act and Section 402 of the Xxxxxxxx-Xxxxx
Act.
(e) Since
January 1, 2009, (i) none of Sterling, Sterling Bank or any Sterling Subsidiary
nor any director, officer or employee, or, to the Knowledge of Sterling,
Sterling Bank or any Sterling Subsidiary, any auditor, accountant or
representative of Sterling, Sterling Bank or any Sterling Subsidiary has
received any written complaint, allegation, assertion, or claim that such entity
has engaged in improper or illegal accounting or auditing practices or maintains
improper or inadequate internal accounting controls and (ii) to the Knowledge of
Sterling, Sterling Bank or any Sterling Subsidiary, no attorney representing
Sterling, Sterling Bank or any Sterling Subsidiary, whether or not employed by
Sterling or Sterling Bank, has reported evidence of a material violation of U.S.
federal or state securities laws, a material breach of fiduciary duty or similar
material violation by Sterling, Sterling Bank, any Sterling Subsidiary or any of
their respective officers, directors, employees or agents to any officer of
Sterling, Sterling Bank, any Sterling Subsidiary, their Boards of Directors or
any member or committee thereof.
Section
3.26 SEC Filings. Except
as set forth in Sterling Schedule 3.26, Sterling has timely filed all forms,
reports and documents required to be filed by Sterling with the SEC since
December 31, 2007 (collectively, the “Sterling SEC Reports”). The
Sterling SEC Reports (i) at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then the date of
such filing), complied in all material respects with the applicable requirements
of the Securities Act of 1933, as amended (the “Securities Act”), and the
Exchange Act, as the case may be, (ii) did not at the time they were filed (or
if amended or superseded by filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such Sterling SEC Reports or
necessary in order to make statements in the Sterling SEC Reports, in light of
the circumstances under which they were made, not misleading.
Section
3.27 Proxy
Materials. None of the information relating to
Sterling, Sterling Bank or the Sterling Subsidiaries to be included in the Proxy
Statement that is to be mailed to the shareholders of Sterling in connection
with the solicitation of their approval of this Agreement will, at the time such
Proxy Statement is mailed or at the time of the meeting of shareholders to which
such Proxy Statement relates, be false or misleading with respect to any
material fact, or omit to
state any material fact necessary in order to make a statement therein not
materially false or misleading.
Section
3.28 Deposit
Insurance. The deposit accounts of Sterling Bank are insured
by the FDIC in accordance with the provisions of the Federal Deposit Insurance
Act (the “FDI Act”); Sterling Bank has paid all regular premiums, required
prepayments of premiums and special assessments and filed all reports required
under the FDI Act.
Section
3.29 Intellectual
Property. Except as set forth in Sterling Schedule 3.29,
Sterling, Sterling Bank and each Sterling Subsidiary own or possess valid and
binding licenses
25
and other
rights to use without payment all patents, copyrights, trade secrets, trade
names, servicemarks, trademarks, computer software and other intellectual
property used in its businesses; none of Sterling, Sterling Bank or any Sterling
Subsidiary has received any notice of conflict with respect thereto that asserts
the right of others.
Section
3.30 Untrue
Statements and Omissions. No representation or warranty
contained in Article 3 of this Agreement or in the Sterling Schedules contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
Section
3.31 Fairness
Opinion. Prior to the execution of this Agreement,
Sterling has received a written opinion from Xxxxxxx, a true and complete copy
of which will be delivered to Roma promptly after the date of this Agreement, to
the effect that as of the date thereof and based upon and subject to the matters
set forth therein, the Merger Consideration is fair to the shareholders of
Sterling from a financial point of view. Such opinion has not been
amended or rescinded as of the date of this Agreement.
Section
3.32 No
Trust Powers. None
of Sterling, Sterling Bank or any Sterling Subsidiary exercises trust powers or
acts as a fiduciary, trustee, agent, custodian, personal representative,
guardian, conservator or investment advisor with respect to assets held other
than acting as a trustee or custodian with respect to XXX accounts related to
insured deposits or as trustee or custodian for other insured deposits
held.
Section
3.33 Registration
Obligations. Sterling is not under any obligation,
contingent or otherwise, that will survive the Merger to register any of its
securities under the Securities Act or any state securities laws.
Section
3.34 Investment
Securities. Except as set forth on Sterling Schedule 3.34, no
investment security or mortgage-backed security held by Sterling, Sterling Bank
or any Sterling Subsidiary, were it to be held as a loan, would be classified as
“substandard,” “doubtful,” “loss,” “other loans especially mentioned,” “other
assets especially mentioned,” “special mention,” “credit risk assets,”
“classified,” “criticized,” “watch list,” “concerned loans” or any comparable
classification.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF ROMA
Roma and
Roma Bank hereby represent and warrant to Sterling and Sterling Bank as follows
as of the date hereof and as of all times up to and including the Effective Time
of the Merger (except as otherwise provided):
Section
4.1 Organization
and Related Matters of Roma.
(a) Roma is a
corporation duly organized, validly existing and in good standing under the laws
of the United States of America. Roma has the corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as now conducted, or as proposed to be conducted pursuant to this
Agreement, and Roma is licensed
26
or
qualified to do business in each jurisdiction in which the nature of the
business conducted by Roma, or the character or location of the properties and
assets owned or leased by Roma makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified (or steps necessary to
cure such failure) would not have a Material Adverse Effect on Roma on a
consolidated basis. Roma is duly registered as a savings and loan
holding company under the Home Owners’ Loan Act of 1933, as
amended. True and correct copies of the Charter and the Bylaws of
Roma, each as amended to the date hereof, have been made available to
Sterling.
(b) Roma Bank
is a federal savings bank, duly organized and validly existing under the laws of
the United States of America. Roma Bank has the corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as such business is now being conducted. True and correct
copies of the Charter and the Bylaws of Roma Bank, each as amended to the date
hereof, have been made available to Sterling.
Section
4.2 Authorization. The
execution, delivery, and performance of this Agreement, and the consummation of
the transactions contemplated hereby and in any related agreements, have been
duly authorized by the Boards of Directors of Roma and Roma Bank, and no other
corporate or other proceedings on the part of Roma and Roma Bank are or will be
necessary to authorize this Agreement and the transactions contemplated
hereby. This Agreement is the valid and binding obligation of Roma
and Roma Bank enforceable against them in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought. Neither the
execution, delivery or performance of this Agreement nor the consummation of the
transactions contemplated hereby will (i) violate any provision of the
respective charter documents of Roma or Roma Bank or, (ii) violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Roma or any of its material properties or assets, except for (X)
such conflicts, breaches or defaults as are set forth in Roma Schedule 4.2; and
(Y) with respect to (ii) above, such as individually or in the aggregate will
not have a Material Adverse Effect on Roma on a consolidated basis.
Section
4.3 Consents
and Approvals. Except for (i) the Consents of the
Regulatory Authorities; (ii) the approval of this Agreement by the shareholders
of Sterling; and (iii) as disclosed in Roma Schedule 4.3, no consents or
approvals by, or filings or registrations with, any third party or any public
body, agency or authority are necessary in connection with the execution and
delivery by Roma and Roma Bank of this Agreement, and the consummation of the
Merger and the other transactions contemplated hereby. Neither Roma
or Roma Bank is a party to any, and there are no pending or, to the Knowledge of
Roma or Roma Bank, any threatened, judicial, administrative, arbitral or other
proceedings, claims (whether asserted or unasserted), actions, causes of action
or governmental investigations against Roma or Roma Bank challenging the
validity of the transactions contemplated by this Agreement.
Section
4.4 Proxy
Materials. None of the information relating solely to
Roma or any Subsidiary to be included or incorporated by reference in the Proxy
Statement that is to be mailed to the shareholders of Sterling in connection
with the solicitation of their approval of this Agreement will, at the time such
Proxy Statement is mailed or at the time of the meeting of
27
shareholders
of Sterling to which such Proxy Statement relates, be false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make a statement therein not false or materially misleading.
Section
4.5 Regulatory
Matters. Roma has not agreed to take any action, has no
Knowledge of any fact and has not agreed to any circumstance that would
materially impede or delay receipt of any Consent from any Regulatory Authority
referred to in this Agreement including matters relating to the Community
Reinvestment Act or the Bank Secrecy Act.
Section
4.6 Access
to Funds. Roma has, and on the Closing Date will have,
access to all funds necessary to consummate the Merger and pay the aggregate
Merger Consideration.
Section 4.7 Untrue
Statements and Omissions. No representation or warranty
contained in Article 4 of this Agreement or in the Roma Schedules contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
ARTICLE
5
COVENANTS
AND AGREEMENTS
Section
5.1 Conduct
of the Business of Sterling and Sterling Bank.
(a) During
the period from the date of this Agreement to the Effective Time of the Merger,
each of Sterling and Sterling Bank shall, and shall cause each Sterling
Subsidiary to: (i) conduct its business in the usual, regular and ordinary
course consistent with past practice and prudent banking principles, (ii) use
its best efforts to maintain and preserve intact for Sterling and Roma its
business organization, employees, goodwill with customers and advantageous
business relationships and retain the services of its officers and key
employees, (iii) except as required by law or regulation, take no action that
would adversely affect or delay the ability of any of the Parties to obtain any
Consent from any Regulatory Authority or other approvals required for the
consummation of the transactions contemplated hereby or to perform
its
(b) covenants
and agreements under this Agreement, and (iv) take no action that results in or
that would reasonably be expected to result in a Material Adverse Effect on
Sterling.
(c) During
the period from the date of this Agreement to the Effective Time of the Merger,
except as required by law or regulation, none of Sterling, Sterling Bank or any
Sterling Subsidiary shall, without the prior written consent of Roma or as set
forth in this Agreement:
(i)
|
change,
delete or add any provision of or to its Certificate of Incorporation or
Bylaws or other governing documents of any such
entity;
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(ii)
|
except
for the issuance of Sterling Shares upon the exercise of any outstanding
Sterling Options, change the number of shares of its authorized, issued or
outstanding capital stock, including any issuance, purchase, redemption,
split, combination or reclassification thereof, or issue or grant any
option, warrant, call, commitment, subscription, right or agreement to
purchase relating to the authorized or issued capital stock, declare, set
aside or pay any dividend or other
distributions;
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28
(iii)
|
with
respect to borrowings, incur any liabilities or material obligations
(other than deposit liabilities and short-term borrowings (including FHLB
borrowings and correspondent bank borrowings) with maturities of six
months or less in the ordinary course of business), whether directly or by
way of guaranty, including any obligation for borrowed money, or whether
evidenced by any note, bond, debenture, or similar
instrument;
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(iv)
|
make
any capital expenditures individually in excess of $5,000 other than
expenditures necessary to maintain existing assets in good
repair;
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(v)
|
except
as set forth on Sterling Schedule 3.14(a), sell, transfer, convey or
otherwise dispose of any real property (including “other real estate
owned”) or interest therein;
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(vi)
|
pay
any bonuses to any employee, officer, director or other person; enter into
any new, or amend in any respect any existing, employment, consulting,
non-competition or independent contractor agreement with any person except
for the Option Cancellation and Release Agreements; alter the terms of any
existing incentive bonus or commission plan; adopt any new or amend in any
material respect any existing employee benefit plan except as may be
required by law or as may be necessary to cancel the Sterling Options;
grant any general increase in compensation or pay any bonuses to its
employees as a class or to its officers or employees
except for salary increases made in the ordinary course and of not more
than two and one-half percent (2.5%) of the individual’s base salary and
not prior to the one year anniversary of such prior year salary increase
and following not less than three business days prior notice to Roma;
grant any increase in salary, fees or other compensation or in other
benefits to any of its directors or officers; or effect any change in any
material respect in retirement benefits to any class of directors,
officers or employees, except as required by
law;
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|
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29
(vii)
|
except
as set forth on Sterling Schedule 5.1(b), enter into or extend any
agreement requiring payments by Sterling in excess of $5,000, including
but not limited to any lease or license relating to real property,
personal property, data processing or bankcard functions, other than in
connection with capital expenditures permitted under Section 5.1(b)(iv)
and sales and dispositions permitted under Section
5.1(b)(v);
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(viii)
|
acquire
or agree to acquire five percent (5%) or more of the assets or equity
securities of any Person or acquire direct or indirect control of any
Person other than in connection with foreclosures in the ordinary course
of business; provided however, Sterling shall consult with Roma with
respect to any such foreclosures;
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(ix)
|
originate,
purchase, extend or grant (a) any loan, including modifications to any
loans existing on the date hereof, in principal amount in excess of
$400,000 or (b) any construction loan, automobile loan or manufactured
housing loan in any amount;
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(x)
|
file
any applications or make any contract with respect to branching by
Sterling Bank (whether de novo, purchase, sale
or relocation) or acquire or construct, or enter into any agreement to
acquire or construct, any interest in real property other than in
connection with foreclosing
proceedings;
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(xi)
|
form
any new Subsidiary;
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(xii)
|
increase
or decrease the rate of interest paid on time deposits or on certificates
of deposit, except in a manner and pursuant to policies consistent with
Sterling Bank’s past practices;
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(xiii)
|
take
any action that is intended or may reasonably be expected to result in any
of the conditions to the Merger set forth in Article 7 and 8 not being
satisfied;
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(xiv)
|
purchase
or sell or otherwise acquire any investment securities other than U.S.
Treasury securities, U.S. Government agency securities or mortgage-backed
securities guaranteed by an agency
of
the U.S. Government, in each case purchased in the ordinary course of
business consistent with past practices and in accordance with Sterling’s
investment policy;
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(xv)
|
commence
any cause of action or proceeding other than in accordance with past
practice or settle any action, claim, arbitration, complaint, criminal
prosecution, demand letter, governmental or other examination or
investigation, hearing, inquiry or other proceeding against it for
material money damages or restrictions upon any of their
operations;
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(xvi)
|
waive,
release, grant or transfer any material rights of value or modify or
change in any material respect any existing agreement or indebtedness to
which it is a party, other than in the ordinary course of business,
consistent with past practice;
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30
(xvii)
|
enter
into, renew, extend or modify any other transaction (other than a deposit
transaction) with any Affiliate other than pursuant to existing
policies;
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(xviii)
|
enter
into any futures contract, option, interest rate caps, interest rate
floors, interest rate exchange agreement or other agreement, or take any
other action for purposes of hedging the exposure of its interest-earning
assets and interest-bearing liabilities to changes in market rates of
interest;
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(xix)
|
except
for the execution of this Agreement, and actions taken or that will be
taken in accordance with this Agreement and performance thereunder, take
any action that would give rise to a right of payment to any individual
under any employment agreement (other than salary earned for prior
service);
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(xx)
|
make
any change in policies in existence on the date of this Agreement with
regard to: the extension of credit, or the establishment of reserves with
respect to the possible loss thereon or the charge off of losses incurred
thereon; investments; asset/liability management; or other material
banking policies in any material respect except as may be required by
changes in applicable law or regulations or by a Regulatory Authority or
changes in GAAP, as advised by Sterling’s independent public
accountants;
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(xxi)
|
except
for the execution of this Agreement, and the transactions contemplated
therein, take any action that would give rise to an acceleration of the
right to payment to any individual under any Employee Benefit
Plan;
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(xxii)
|
purchase
or otherwise acquire, or sell or otherwise dispose of, any assets or incur
any liabilities other than in the ordinary course of business consistent
with past practices and policies or otherwise permitted under this
Agreement;
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(xxiii)
|
foreclose
upon or take a deed or title to any commercial real estate without first
conducting a Phase I environmental assessment of the property or if such
assessment indicates the presence of Hazardous Material or an underground
storage tank;
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(xxiv)
|
make
any written communications to the directors, officers or employees of
Sterling, Sterling Bank or any Sterling Subsidiary pertaining to
compensation or benefit matters that are affected by the transactions
contemplated by this Agreement without first providing Roma with a copy or
description of the intended communication, which Roma shall promptly
review and comment on, and Roma and Sterling shall cooperate in providing
any such mutually agreeable
communication;
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31
(xxv)
|
issue
any broadly distributed communication of a general nature to customers
without the prior approval of Roma (which shall not be unreasonably
withheld), except as required by law or for communications in the ordinary
course of business consistent with past practice that do not relate to the
Merger or other transactions contemplated hereby;
or
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(xxvi)
|
agree
to do any of the foregoing.
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Section
5.2 Current
Information. During the period from the date of this
Agreement to the Effective Time of the Merger or the time of termination or
abandonment of this Agreement, Sterling will cause one or more of its designated
representatives to confer on a regular and frequent basis with representatives
of Roma and to report the general status of the ongoing operations of Sterling,
Sterling Bank and the Sterling Subsidiaries. Sterling will promptly
notify Roma of any material change in the normal course of business or the
operations or the properties of Sterling, any governmental complaints,
investigations or hearings (or communications indicating that the same may be
contemplated) affecting Sterling, Sterling Bank, the Sterling Subsidiaries or
the threat of litigation, claims, threats or causes of action involving
Sterling, and will keep Roma fully informed of such events. Sterling
will furnish to Roma, promptly after the preparation and/or receipt by Sterling
thereof, copies of its unaudited monthly and quarterly periodic financial
statements and Call Reports for the applicable periods then ended, and such
financial statements and Call Reports shall, upon delivery to Roma, be treated,
for purposes of Section 3.3 hereof, as among the Financial Statements of
Sterling or the Financial Regulatory Reports of Sterling Bank, as
applicable.
Section
5.3 Access
to Properties; Personnel and Records; Systems
Integration.
(a) For so
long as this Agreement shall remain in effect, Sterling, Sterling Bank and the
Sterling Subsidiaries shall permit Roma or its agents upon reasonable notice
reasonable access, during normal business hours, to their properties, and shall
disclose and make available (together with the right to copy) to Roma and to its
internal auditors, loan review officers, attorneys, accountants and other
representatives, all books, papers and records relating to the assets, stock,
properties, operations, obligations and liabilities of Sterling, Sterling Bank
and the Sterling Subsidiaries, including all books of account (including the
general ledger), tax records, minute books of directors’ and shareholders’
meetings (other than minutes that discuss this Agreement or any of the
transactions contemplated by this Agreement), organizational documents, bylaws,
contracts and agreements, filings with any regulatory agency, correspondence
with regulatory or taxing authorities, documents relating to assets, titles,
abstracts, appraisals, consultant’s reports, plans affecting employees,
securities transfer records and shareholder lists, and any other assets,
business activities or prospects in which Roma may have a reasonable interest,
and Sterling and Sterling Bank shall use their reasonable best efforts to
provide to Roma and its representatives access to the work papers of Sterling’s
accountants. During the period from the date of this Agreement to the
Effective Time of the Merger or the time of termination of this Agreement,
Sterling shall provide to Roma with as much notice as
32
reasonably
possible of all special and regular meetings of the Sterling and Sterling Bank
Boards of Directors and committees thereof and of all meetings of officers of
Sterling, and Sterling will invite a Roma representative to attend all meetings
of Sterling Bank’s Asset/Liability Committee, Audit Committee and Loan Committee
except those related to this Agreement or any of the transactions contemplated
by this Agreement and provide Roma with a copy of the board and committee
packages in advance of such meetings and a copy of the minutes of such meetings
promptly thereafter except those board and committee packages and minutes
relating to this Agreement or the transactions contemplated by this
Agreement. Sterling shall provide information not less than weekly
regarding the business activities and operations of Sterling Bank and all
parties will establish procedures for coordination and monitoring of transition
activities. Notwithstanding the foregoing, Sterling shall not be
required to provide access to or to disclose information where such access or
disclosure would contravene any law, rule, regulation, order or judgment or
would violate any confidentiality agreement entered into by Sterling prior to
the date hereof; provided that each party shall cooperate with the other party
in seeking to obtain Consents from appropriate parties under whose rights or
authority access is otherwise restricted. The foregoing rights
granted shall not, whether or not and regardless of the extent to which the same
are exercised, affect the representations and warranties made in this
Agreement.
(b) All
information furnished by the Parties hereto pursuant to this Agreement, whether
furnished before or after the date of this Agreement, shall be treated as the
sole property of the party providing such information until the consummation of
the Merger contemplated hereby and, if such transaction shall not occur, the
party receiving the information shall return to the party that furnished such
information, all documents or other materials containing, reflecting or
referring to such information, shall use its best efforts to keep confidential
all such information, and shall not directly or indirectly use such information
for any competitive
or other commercial purposes. The obligation to keep such information
confidential shall continue for two (2) years from the date the proposed
transactions are abandoned but shall not apply to (i) any information that (A)
the party receiving the information was already in possession of prior to
disclosure thereof by the party furnishing the information, (B) was then
available to the public, or (C) became available to the public through no fault
of the party receiving the information; or (ii) disclosures pursuant to a legal
requirement or in accordance with an order of a court of competent jurisdiction
or regulatory agency; provided, however, the party that is the subject of any
such legal requirement or order shall use its best efforts to give the other
party at least ten (10) business days prior notice thereof. Each
party hereto acknowledges and agrees that a breach of any of their respective
obligations under this Section 5.3 would cause the other irreparable harm for
which there is no adequate remedy at law, and that, accordingly, each is
entitled to injunctive and other equitable relief for the enforcement thereof in
addition to damages or any other relief available at law. Without the
consent of the other party, neither party shall use information furnished to
such party other than for the purposes of the transactions contemplated
hereby.
(c) From and
after the date hereof, Sterling and Sterling Bank shall, and shall cause their
directors, officers and employees to, and shall make all reasonable efforts to
cause Sterling’s data processing service providers to, cooperate and assist Roma
in connection with an electronic and systematic conversion of all applicable
data regarding Sterling to Roma Bank’s system of electronic data processing
provided that in no event shall such electronic and
33
systematic
conversion take place prior to the Effective Time of the Merger. In
furtherance of, and not in limitation of, the foregoing, Sterling shall make
reasonable arrangements during normal business hours to permit personnel and
representatives of Roma Bank to train Sterling Bank’s employees in Roma Bank’s
system of electronic data processing. Sterling shall permit Roma to
train Sterling Bank’s employees during the 60-day period before the anticipated
Effective Time of the Merger (with certain key employees designated by Roma to
be made available for training during the 90-day period before the anticipated
Effective Time of the Merger) with regard to Roma’s operations, policies and
procedures at Roma’s sole cost and expense. This training may take
place at the branch offices of Sterling Bank or Roma Bank at such times to be
determined in cooperation with Sterling and shall be conducted in a manner so as
to not interfere with the business operations of the Sterling Bank branch
offices.
Section
5.4 Approval
of Shareholders. Sterling shall prepare the Proxy
Statement and shall permit Roma to review and comment on such Proxy Statement
prior to its filing with the SEC, such filing to occur within 30 days after the
date of this Agreement. Sterling shall also inform Roma of any and
all comments it receives from the SEC on the preliminary Proxy Statement and
shall permit Roma to review and comment on any revised versions prior to filing
with the SEC and the final Proxy Statement prior to mailing to its
shareholders. Sterling will take all steps necessary under applicable
laws to call, give notice of, convene and hold a meeting of its shareholders for
the purpose of approving this Agreement and the transactions contemplated hereby
and for such other purposes consistent with the complete performance of this
Agreement as may be necessary or desirable (“Sterling Shareholders Meeting”), at
such time as may be mutually agreed to by the Parties (but in no event later
than 45 days after the date of clearance of such Proxy
Statement). The Board of Directors of Sterling will recommend to its
shareholders the approval of this Agreement and the transactions contemplated
hereby, and Sterling
will use its reasonable best efforts to obtain the necessary approvals by its
shareholders of this Agreement and the transactions contemplated
hereby.
Section
5.5 No
Other Bids. Except with respect to this Agreement and
the transactions contemplated hereby or as otherwise permitted by this Section
5.5, neither Sterling nor any Affiliate (as defined herein) thereof, nor any
investment banker, attorney, accountant or other representative (collectively,
“representatives”) retained by Sterling shall directly or indirectly (i)
initiate, solicit, encourage or otherwise take any action designed to or could
reasonably be expected to facilitate any inquiries or the making of any proposal
or offer that constitutes, or may reasonably be expected to lead to, any
“Acquisition Proposal” (as defined below) by any other party or (ii) enter into,
continue or otherwise participate in any discussions or negotiations regarding
or furnish any information with respect to, or otherwise cooperate in any way
with, any Acquisition Proposal. Neither Sterling nor any Affiliate or
representative thereof shall furnish any non-public information that it is not
legally obligated to furnish or negotiate or enter into any agreement or
contract with respect to any Acquisition Proposal, and shall direct and use its
reasonable efforts to cause its Affiliates or representatives not to engage in
any of the foregoing. Sterling shall promptly notify Roma orally and
in writing in the event that it receives any inquiry or proposal relating to any
such transaction. Sterling shall immediately cease and cause to be
terminated as of the date of this Agreement any existing activities, discussions
or negotiations with any other parties conducted heretofore with respect to any
of the foregoing. Notwithstanding the foregoing provisions of this
Section 5.5, in the event that, prior to obtaining shareholder approval of the
Merger, Sterling receives an unsolicited bona fide
34
written
Acquisition Proposal not solicited in violation of this Agreement, and the
Sterling Board of Directors concludes in good faith (after consultation with its
outside legal counsel and financial advisor) (i) it is legally necessary for the
proper discharge of its fiduciary duties for the Board to respond to such
Acquisition Proposal and (ii) such Acquisition Proposal constitutes a “Superior
Proposal” (as defined below), Sterling may furnish or cause to be furnished
confidential information or data to the third party making such proposal and
participate in negotiations or discussions, provided that prior to providing (or
causing to be provided) any confidential information or data permitted to be
provided pursuant to this sentence, Sterling shall have entered into a
confidentiality agreement with such third party on terms no less restrictive to
Sterling than the confidentiality agreement with Roma, and provided further that
Sterling also shall provide to Roma a copy of any such confidential information
or data that it is providing to any third party pursuant to this Section 5.5 to
the extent not previously provided or made available to
Roma. Sterling shall promptly advise Roma orally and in writing of
any Acquisition Proposal, the material terms and conditions of any such
Acquisition Proposal (including any changes thereto) and the identity of the
person making any such Acquisition Proposal. Sterling shall (i) keep
Roma fully informed in all material respects of the status and details
(including any change to the terms thereof) of any Acquisition Proposal, (ii)
provide to Roma as soon as practicable after receipt or delivery thereof copies
of all correspondence and other written material sent or provided to Sterling or
Sterling Bank from any person that describes any of the terms or conditions of
any Acquisition Proposal (including any draft acquisition agreement) and
(iii) keep Roma fully informed in all material respects of the status and
details of any determination by Sterling’s Board of Directors with respect to
any such Acquisition Proposal.
The term
“Acquisition Proposal” shall, with respect to Sterling, mean any proposal or
offer for any of the following: (a) a merger or consolidation, or any similar
transaction (other than the Merger)
of any company with Sterling, (b) a purchase, lease or other acquisition of all
or substantially all the assets of Sterling, (c) a purchase or other acquisition
of “beneficial ownership” by any “person” or “group” (as such terms are defined
in Section 13(d)(3) of the Exchange Act) (including by way of merger,
consolidation, share exchange, or otherwise) that would cause such person or
group to become the beneficial owner of securities representing 15% or more of
the voting power of Sterling, or (d) a tender or exchange offer to acquire
securities representing 15% or more of the voting power of Sterling. “Superior
Proposal” means an Acquisition Proposal that the Board of Directors of Sterling
reasonably determines (after consultation with Xxxxxxx Financial Group, LLC or
another financial advisor of nationally recognized reputation) to be
(i) more favorable to the shareholders of Sterling from a financial point
of view than the Merger (taking into account all the terms and conditions of
such proposal and this Agreement (including any changes to the financial terms
of this Agreement proposed by Roma in response to such offer or otherwise)) and
(ii) reasonably capable of being completed, taking into account all
financial, legal, regulatory and other aspects of such proposal.
Section
5.6 Maintenance
of Properties; Certain Remediation and Capital
Improvements. Sterling, Sterling Bank and the Sterling
Subsidiaries will maintain their properties and assets in satisfactory condition
and repair for the purposes for which they are intended, ordinary wear and tear
excepted.
Section
5.7 Environmental
Audits. Upon the written request of Roma, which request
shall occur within thirty (30) days of the date hereof, Sterling will permit
Roma, at Roma’s
35
expense,
with respect to each parcel of real property owned by Sterling or Sterling Bank,
to procure an environmental audit .
Section
5.8 Title
Insurance. Upon the written request of Roma, which request
shall occur within thirty (30) days of the date hereof, Sterling will permit
Roma, at Roma’s expense, with respect to each parcel of real property owned by
Sterling or Sterling Bank, to obtain a commitment to issue owner’s title
insurance in such amounts and by such insurance company reasonably acceptable to
Roma.
Section
5.9 Surveys. Upon
the written request of Roma, which request shall occur within thirty (30) days
of the date hereof, with respect to each parcel of real property as to which a
title insurance policy is to be procured pursuant to Section 5.8, Sterling will
permit Roma, at Roma’s expense, to obtain a survey of such real property, which
survey shall be reasonably acceptable to and shall be prepared by a licensed
surveyor reasonably acceptable to Roma, disclosing the locations of all
improvements, easements, sidewalks, roadways, utility lines and other matters
customarily shown on such surveys and showing access affirmatively to public
streets and roads and providing the legal description of the property in a form
suitable for recording and insuring the title thereof (the
“Survey”).
Section
5.10 Consents to
Assign and Use Leased Premises. With respect to the leases
disclosed in Sterling Schedule 3.14(b), Sterling will use its reasonable best
efforts to obtain all Consents necessary or appropriate to transfer and assign
all right, title and interest of Sterling and Sterling Bank to Roma Bank and to
permit the use and operation of the leased premises by Roma Bank as of the
Closing.
Section
5.11 Compliance
Matters. Prior to the Effective Time of the Merger, Sterling
shall take, or cause to be taken, all steps reasonably requested by Roma to cure
any deficiencies in regulatory compliance by Sterling or Sterling Bank;
provided, however, neither Roma nor Roma Bank shall be responsible for
discovering, nor shall Roma have any liability resulting from, such deficiencies
or attempts to cure them.
Section
5.12 Support
Agreements. Sterling shall deliver to Roma, as of the date of
the Agreement, a Support Agreement in form and substance as set forth at Exhibit
B, executed by each director and each executive officer (including the President
and Chief Executive Officer, the Chief Financial Officer and each Executive Vice
President) of Sterling and Sterling Bank.
Section
5.13 Disclosure
Controls.
(a) Between
the date of this Agreement and the Effective Time of the Merger, Sterling shall
maintain disclosure controls and procedures that are effective to ensure that
material information relating to Sterling, Sterling Bank and the Sterling
Subsidiaries is made known to the President and Chief Executive Officer and
Chief Financial Officer of Sterling to permit Sterling to record, process,
summarize and report financial data in a timely and accurate manner; (ii) such
officers shall promptly disclose to Sterling’s auditors and audit committee any
significant deficiencies in the design or operation of internal controls that
could adversely affect Sterling’s ability to record process, summarize and
report financial data, any material weaknesses identified in internal controls,
and
36
any
fraud, whether or not material, that involves management or other employees who
have a significant role in Sterling’s internal controls; and (iii) Sterling
shall take appropriate corrective actions to address any such significant
deficiencies or material weaknesses identified in the internal
controls.
(b) Between
the date of this Agreement and the Effective Time of the Merger, Sterling shall,
upon reasonable notice during normal business hours, permit Roma (a) to meet
with the officers of Sterling and Sterling Bank responsible for the Financial
Statements of Sterling and Sterling Bank and the internal control over financial
reporting of Sterling and Sterling Bank to discuss such matters as Roma may deem
reasonably necessary or appropriate concerning Roma’s obligations under Sections
302 and 906 of the Xxxxxxxx-Xxxxx Act; and (b) to meet with officers of Sterling
and Sterling Bank to discuss the integration of appropriate disclosure controls
and procedures and internal control over financial reporting relating to
Sterling’s and Sterling Bank’s operations with the controls and procedures and
internal control over financial reporting of Roma for purposes of assisting Roma
in compliance with the applicable provisions of the Xxxxxxxx-Xxxxx Act following
the Effective Time of the Merger. Sterling shall, and shall cause its
and Sterling Bank’s respective employees and accountants to, fully cooperate
with Roma in the preparation, documentation, review, testing and all other
actions Xxxx xxxxx reasonably necessary to satisfy the internal control
certification requirements of Section 404 of the Xxxxxxxx-Xxxxx
Act.
ARTICLE
6
ADDITIONAL
COVENANTS AND AGREEMENTS
Section
6.1 Best
Efforts; Cooperation. Subject to the terms and
conditions of this Agreement, each of the Parties hereto agrees to use its
reasonable best efforts in good faith promptly to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations, or otherwise, including
attempting to obtain all necessary Consents, so as permit consummation of the
Merger as promptly as practicable and otherwise to enable consummation of the
transactions contemplated by this Agreement, including the satisfaction of the
conditions set forth in Article 7 hereof, and furthermore agrees to cooperate
fully with the other Party to that end.
Section
6.2 Regulatory
Matters.
(a) As
promptly as practicable following the execution and delivery of this Agreement,
but in no event more than 45 days from the date hereof, Roma and Sterling shall
cause to be prepared and filed all required applications and filings with the
Regulatory Authorities that are necessary or contemplated for the obtaining of
the Consents of the Regulatory Authorities or consummation of the
Merger. Such applications and filings shall be in such form as may be
prescribed by the respective government agencies and shall contain such
information as they may require. The Parties hereto will cooperate
with each other and use their best efforts to prepare and execute all necessary
documentation, to effect all necessary or contemplated filings and to obtain all
necessary or contemplated permits, consents, approvals, rulings and
authorizations of government agencies and third parties that are necessary or
contemplated to consummate the transactions contemplated by this Agreement,
including, without limitation, those required or contemplated from the
Regulatory Authorities, and the shareholders of Sterling. Each of the
Parties shall have the right to review any filing made with,
37
or
written material submitted to, any government agencies in connection with the
transactions contemplated by this Agreement.
(b) Each
Party hereto will furnish the other party with all information concerning
itself, its subsidiaries, directors, trustees, officers, shareholders and
depositors, as applicable, and such other matters as may be necessary or
advisable in connection with any statement or application made by or on behalf
of any such party to any governmental body in connection with the transactions,
applications or filings contemplated by this Agreement. The Parties
hereto will promptly furnish each other with copies of written communications
received by them or their respective subsidiaries, if any, from, or delivered by
any of the foregoing to, any governmental body in respect of the transactions
contemplated hereby.
Section
6.3 Employment
and Employee Benefits Matters.
(a) The
Parties acknowledge that nothing in this Agreement shall be construed as
constituting an employment agreement between Roma or any of its Affiliates and
any officer or employee of Sterling or an obligation on the part of Roma or any
of its Affiliates to employ any such officers or employees.
(b) Roma will
honor the Change in Control Agreements of Sterling as set forth at Sterling
Schedule 6.3(b), subject to the terms of the Addenda to the Change in Control
Severance Agreement entered into between Roma, Roma Bank and certain officers of
Sterling Bank, the form of which is attached as Exhibit C. Roma will
also honor the Employment Agreement between Sterling Bank and Xxxxxx Xxxx, as
amended by the Addendum to Employment Agreement attached as Exhibit
X. Xxxxxxxx Schedule 6.3(b) includes a calculation of all potential
payments and supporting data as detailed in the Employment Agreement and the
Change in Control Agreements calculated as of the date of this Agreement and to
be updated in advance of the Closing Date.
(c) Roma
shall merge the Sterling 401(k) plan into its 401(k) plan as soon as
administratively feasible after the Effective Time of the
Merger. Sterling employees who continue as employees of Roma Bank
after the Effective Time of the Merger (“Continuing Employees”) shall receive,
for purposes of eligibility to participate and receive employer contributions
under any Roma Bank 401(k) plan, credit for all service with Sterling, Sterling
Bank, or any Sterling Subsidiary and shall enter any Roma Bank 401(k) plan in
accordance with its terms as soon as administratively feasible following the
Effective Time of the Merger.
(d) After the
Merger, Roma shall continue, except to the extent not consistent with law,
Sterling’s health and welfare benefit plans, programs, insurance and other
policies until such time as Roma elects to take alternative
action. Sterling will assist Roma before the Effective Time of the
Merger in reviewing such benefit plans and programs and will take such actions
that may be requested by Roma with respect to such plans to take effect not
sooner than the Effective Time, unless consented by Sterling. In the
event Roma elects to terminate any of Sterling’s health and welfare benefit
plans, programs, insurance and other policies, Continuing Employees will become
eligible to participate in the medical, dental, health or disability plan
maintained by Roma or Roma Bank. Roma or Roma Bank, as applicable,
shall cause each such plan that shall be implemented as a replacement plan to
such Sterling plan that is terminating to (i) waive any preexisting condition
limitations to the extent such conditions for such participant
38
are
covered under the applicable Sterling medical, health, dental or disability
plans and (ii) waive any waiting period limitation or evidence of insurability
requirement that would otherwise be applicable to such employee on or after the
plan enrollment date, unless such employee had not yet satisfied any similar
limitation or requirement under the analogous Sterling Employee Benefit Plan
prior to the enrollment date.
(e) Until the
Effective Time of the Merger, Sterling shall be liable for all obligations for
continued health coverage pursuant to Section 4980B of the Code and Sections 601
through 609 of ERISA (“COBRA”) with respect to each Sterling qualifying
beneficiary (as defined in COBRA) who incurs a qualifying event (as defined in
COBRA) before the Effective Time of the Merger. Roma shall be liable
for (i) all obligations for continued health coverage under COBRA with respect
to each Sterling qualified beneficiary (as defined in COBRA) who incurs a
qualifying event (as defined in COBRA) from and after the Effective Time of the
Merger, and (ii) for continued health coverage under COBRA from and after the
Effective Time of the Merger for each Sterling qualified beneficiary who incurs
a qualifying event before the Effective Time of the Merger.
(f) Employees
of Sterling (other than the Named Officers, as such term defined in Section
11.1) as of the date of the Agreement who remain employed by Sterling as of the
Effective Time of the Merger and whose employment is terminated by Sterling or
Roma Bank (absent termination for cause as determined by the employer) within
six (6) months after the Effective Time shall receive severance pay equal to two
(2) weeks of base weekly pay for each year of employment service completed with
Sterling prior to the Effective Time, with a minimum severance payment to an
individual equal to four (4) weeks of base pay and a maximum payment equal to 26
weeks of base pay. Such severance pay will be made at regular payroll
intervals. Such severance payments will be in lieu of any severance
pay plans that may be in effect at Sterling prior to the Effective Time of the
Merge
(g) Continuing
Employees shall be eligible to participate in the Roma Employee Stock Ownership
Plan, provided that such employees shall not receive credit for prior employment
service with Sterling for purposes of eligibility to participate and vesting
service with respect to such plan. Continuing Employees
shall be eligible to participate in Roma’s Defined Benefit Pension Plan (or any
substitute plan), provided that such employees shall not receive credit for
prior employment service with Sterling for purposes of eligibility to
participate and vesting service, nor for purposes of benefit accrual purposes,
with respect to such plan.
Section
6.4 Indemnification.
(a) For a
period of six (6) years after the Effective Time of the Merger, Roma shall
indemnify, defend and hold harmless the directors and officers of Sterling and
Sterling Bank (each an “Indemnified Party”) against all liability arising out of
actions or omissions occurring at or prior to the Effective Time of the Merger
(including, without limitation, transactions contemplated by this Agreement) to
the fullest extent that Sterling or Sterling Bank would have been permitted
under any applicable law. Roma shall pay expenses, including
reasonable attorney’s fees, as they are incurred and in advance of the final
disposition of any such action or proceeding to each Indemnified Party to the
full extent permitted by applicable
39
state or
federal law upon receipt of an undertaking to repay such advance payments if he
or she shall be adjudicated or determined not to be entitled to
indemnification.
(b) After the
Effective Time of the Merger, directors, officers and employees of Sterling,
except for the indemnification rights provided for in this Section 6.4 above,
shall have indemnification rights having prospective application
only. These prospective indemnification rights shall consist of such
rights to which directors, officers and employees of Roma and its subsidiaries
would be entitled under the Charter and Bylaws of Roma or the particular
subsidiary for which they are serving as officers, directors or employees and
under such directors’ and officers’ liability insurance policy as Roma may then
make available to officers, directors and employees of Roma and its
subsidiaries.
(c) Roma
shall (and Sterling shall cooperate prior to the Effective Time of the Merger)
maintain in effect for a period of three (3) years after the Effective Time of
the Merger Sterling’s existing directors’ and officers’ liability insurance
policy; provided that Roma may substitute therefor (i) policies with comparable
coverage and amounts containing terms and conditions that are substantially no
less advantageous or (ii) with the consent of Sterling (given prior to
the Effective Time of the Merger) any other policy with respect to claims
arising from facts or events that occurred prior to the Effective Time of the
Merger and covering persons who are currently covered by such insurance; and
provided further that Roma shall not be obligated to make premium payments
applicable to such three (3) year period in respect of such policy (or coverage
replacing such policy) that exceed, for the portion related to Sterling’s
directors and officers, 135% of the annual premium payments on Sterling’s
current policy, as in effect as of the date of this Agreement (the “Maximum
Amount”). If the amount of premium that is necessary to maintain or
procure such insurance coverage exceeds the Maximum Amount, Roma shall use its
reasonable efforts to maintain the most advantageous policies of director’s and
officer’s liability insurance obtainable for a premium equal to the Maximum
Amount.
(d) If
Roma, Roma Bank or any of their successors and assigns shall consolidate with or
merge into any other person and shall not be the continuing or surviving person
of such consolidation or merger (including without limitation the merger of
Sterling into Roma contemplated hereby), or shall transfer all or substantially
all of its assets to any person, then, in each case, proper provisions shall be
made so that the successors and assigns of Roma and Roma Bank shall assume the
obligations set forth in this Section 6.4.
(e) The
provisions of this Section 6.4 are intended for the benefit of, and shall
be enforceable by each Indemnified Party, and each Indemnified Party’s heirs and
representatives.
Section
6.5 Transaction
Expenses of Sterling.
(a) Sterling
Schedule 6.5(a) contains Sterling’s estimated budget of transaction-related
expenses reasonably anticipated to be payable by Sterling in connection with
this Agreement and the transactions contemplated thereunder through the Closing
Date, including any payments to be made in accordance with any employment
agreements, change in control agreements, non-compete agreements or bonus
arrangements between any officer and Sterling to be made before or after the
Effective Time of the Merger, based on facts and
40
circumstances
then currently known, including the fees and expenses of counsel, accountants,
investment bankers and other professionals. Sterling shall use its
best efforts to maintain expenses within the budget.
(b) Promptly
after the execution of this Agreement, Sterling shall ask all of its attorneys
and other professionals to render current and correct invoices for all unbilled
time and disbursements within 30 days, except for any success fees due upon
completion or termination of the Merger, all of which are detailed, including
the amount and circumstances under which they will be due, on Sterling Schedule
6.5(b). Sterling shall review these invoices and track such expenses
against the budget referenced above, and Sterling shall advise Roma of such
matters prior to payment of such invoices.
(c) Sterling
shall ask its professionals to render monthly invoices within thirty (30) days
after the end of each month. Sterling shall advise Roma monthly of
such invoices for professional services, disbursements and reimbursable expenses
that Sterling has incurred in connection with this Agreement prior to payment of
such invoices, and Sterling shall track such expenses against the budget
referenced above.
(d) Sterling,
in reasonable consultation with Roma, shall make all arrangements with respect
to the printing and mailing of the Proxy Statement, the expenses of which shall
be the responsibility of Sterling.
(e) Not later
than two (2) business days prior to the Closing Date, Sterling shall provide
Roma with an accounting of all transaction related expenses incurred by it
through the Closing Date, including a good faith estimate of such expenses
incurred or to be incurred through the Closing Date but as to which invoices
have not yet been submitted or payments have not been made. Sterling
shall detail any variance of such transaction expenses to the budget set forth
at Sterling Schedule 6.5(a) as of the date of the Agreement.
Section
6.6 Press
Releases. Roma and Sterling agree that they will not issue any
press release or other public disclosure related to this Agreement or the
transactions contemplated hereby without first consulting with the other party
as to the form and substance of such disclosures that may relate to the
transactions contemplated by this Agreement, provided, however, that nothing
contained herein shall prohibit either party, following notification to the
other party, from making any disclosure that is required by law or
regulation.
Section
6.7 Prior
Notice and Approval Before Payments To Be Made. No payments
shall be made by Sterling to any director, officer or employee in accordance
with any agreement, contract, plan or arrangement (including, but not limited to
any employment agreement, severance arrangement, stock option, non-compete
agreements, deferred compensation plan, bonus, vacation or leave plan or other
compensation or benefits program), which payments arise upon the
termination of such agreement, contract, plan or arrangement or upon the
termination of employment or service of such recipient with Sterling, except to
the extent that such intended payments (i) have been set forth in the Sterling
Schedules furnished to Roma at the date of this Agreement, (ii) with prior
written notice to Roma of such intended payment, and (iii) delivery of a written
acknowledgement and release executed by the recipient and Sterling reasonably
satisfactory to Roma in form and substance. Prior to Sterling making
any such payments to any officer or director, Sterling, with the assistance of
its tax accountants, shall determine that no
41
such
payments, if made, shall constitute an “excess parachute payment” in accordance
with Section 280G of the Code, and Sterling shall furnish Roma with a detailed
schedule related to such determination prior to making any such
payments.
Section
6.8 Boards
of Directors of Roma and Roma Bank. Roma will appoint to the
Board of Directors of Roma and Roma Bank one individual who currently serves on
the Board of Directors of Sterling and who is acceptable to Roma in its sole and
absolute discretion.
Section
6.9 Supplemental
Indenture. Prior to the Effective Time of the Merger, Sterling
shall take all actions necessary to enter into a supplemental indenture with the
Trustee of the Indenture dated May 1, 2007 for Sterling’s variable rate junior
subordinated deferrable interest debentures to evidence the succession of Roma
as of the Effective Time of the Merger. The form of the supplemental
indenture shall be reasonably acceptable to Roma, and Roma agrees to accept the
covenants, agreements and obligations of Sterling under such
Indenture.
Section
6.10 Notification
of Certain Matters. Each party shall give prompt notice
to
the others of (a) any event, condition, change, occurrence, act or omission that
causes any of its representations hereunder to cease to be true in all material
respects (or, with respect to any such representation that is qualified as to
materiality, causes such representation to cease to be true in all respects);
and (b) any event, condition, change, occurrence, act or omission that
individually or in the aggregate has, or that, so far as reasonably can be
foreseen at the time of its occurrence, is reasonably likely to have, a Material
Adverse Effect on such party. Each of Sterling and Roma shall give
prompt notice to the other party of any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement.
ARTICLE
7
MUTUAL
CONDITIONS TO CLOSING
The
obligations of Roma, on the one hand, and Sterling, on the other hand, to
consummate the transactions provided for herein shall be subject to the
satisfaction of the following conditions, unless waived in writing as
hereinafter provided for:
Section
7.1 Shareholder
Approval. The Merger shall have been approved by the requisite
vote of the shareholders of Sterling.
Section
7.2 Regulatory
Approvals. All necessary Consents of the Regulatory
Authorities shall have been obtained and all notice and waiting periods required
by law to pass after receipt of such Consents shall have passed, and all
conditions to consummation of the Merger set forth in such Consents shall have
been satisfied.
Section
7.3 Litigation. There
shall be no actual or threatened causes of action, investigations or proceedings
(i) challenging the validity or legality of this Agreement or the consummation
of the transactions contemplated by this Agreement, or (ii) seeking damages in
connection with the transactions contemplated by this Agreement, or (iii)
seeking to restrain or invalidate the transactions contemplated by this
Agreement, that, in the case of (i) through (iii), and in the reasonable
judgment of either Roma or Sterling, based upon advice of counsel, would
42
have a
Material Adverse Effect with respect to Roma or Sterling, as the case may
be. No judgment, order,
injunction or decree (whether temporary, preliminary or permanent) issued by any
court or agency of competent jurisdiction or other legal restraints or
prohibition preventing the consummation of the Merger or any of the other
transactions contemplated by this Agreement shall be in effect. No
statute, rule, regulation, order, injunction or decree (whether temporary,
preliminary or permanent) shall have been enacted, entered, promulgated or
enforced by any Regulatory Authority that prohibits, restricts or makes illegal
the consummation of the Merger.
Section
7.4. Disclosure
Supplements. From time to time prior to the Effective Time of
the Merger, each Party will promptly supplement or amend their
respective Schedules delivered in connection herewith with respect to any
matter hereafter arising that, if existing, occurring or known at the date of
this Agreement, would have been required to be set forth or described
in such Schedules
or that is necessary to correct any information in such Schedules that has
been rendered materially inaccurate thereby. No supplement or amendment to
such Schedules shall have any effect for the purpose of determining
satisfaction of the conditions set forth in Articles 8 and 9 and shall be for
informational purposes only.
ARTICLE 8
CONDITIONS
TO THE OBLIGATIONS OF ROMA
The
obligation of Roma to consummate the Merger is subject to the satisfaction of
each of the following conditions, unless waived as hereinafter provided
for:
Section
8.1 Representations
and Warranties. The representations and warranties of
Sterling and Sterling Bank contained in this Agreement or in any certificate or
document delivered pursuant to the provisions hereof will be true and correct,
in all material respects (or where any statement in a representation or warranty
expressly contains a standard of materiality, such statement shall be true and
correct in all respects taking into consideration the standard of materiality
contained therein), as of the Effective Time of the Merger (as though made on
and as of the Effective Time of the Merger), except to the extent such
representations and warranties are by their express provisions made as of a
specified date and except for changes therein contemplated by this
Agreement. For purposes of this paragraph, such representations and
warranties shall be deemed to be true and correct unless the failure of such
representations and warranties to be true and correct, either individually or in
the aggregate and without giving effect to any qualification as to materiality
or Material Adverse Effect set forth in such representations and warranties,
will have or is reasonably likely to have a Material Adverse Effect on Sterling
and its subsidiaries taken as a whole. Notwithstanding the immediately preceding
sentence, the representations and warranties contained in Section 3.2 shall be
deemed untrue and incorrect if not true and correct except to an immaterial
(relative to Section 3.2 taken as a whole) extent.
Section
8.2 Performance
of Obligations. Sterling and Sterling Bank shall have
performed in all material respects all covenants, obligations and agreements
required to be performed by it under this Agreement prior to the Effective Time
of the Merger.
Section
8.3 Certificate
Representing Satisfaction of Conditions. Sterling
shall have delivered to Roma a certificate of the Chief Executive Officer of
Sterling dated as of the Closing
43
Date and
without personal liability as to the satisfaction of the matters described in
Sections 8.1 8.2, 8.8 and 8.9 hereof, and such certificate shall be deemed to
constitute additional representations, warranties, covenants, and agreements of
Sterling under Article 3 of this Agreement.
Section
8.4 Consents
Under Agreements. Sterling shall have obtained the
consent or approval of each Person (other than the Consents of the Regulatory
Authorities) whose consent or approval shall be required in order to permit the
succession by the Surviving Corporation to any obligation, right or interest of
Sterling under any loan or credit agreement, note, mortgage, indenture, lease,
license, or other agreement or instrument, except those for which failure to
obtain such consents and approvals would not, individually or in the aggregate,
have a
Material Adverse Effect on the Surviving Corporation or upon the consummation of
the transactions contemplated by this Agreement.
Section
8.5 Material
Condition. There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger by any Regulatory Authority, other than standard
conditions that are normally imposed by Regulatory Authorities in bank merger
transactions, that, in connection with the grant of any Consent by any
Regulatory Authority, imposes, in the good faith judgment of Roma, any material
adverse requirement upon Roma or any Roma subsidiary, including, without
limitation, any requirement that Roma sell or dispose of any significant amount
of the assets of Sterling or any other Roma subsidiary.
Section
8.6 Certification
of Claims. Sterling shall have delivered a certificate to Roma
that, other than as set forth in such certificate, Sterling is not aware of any
pending or threatened claim under the directors and officers insurance policy or
the fidelity bond coverage of Sterling.
Section
8.7 Audited Financial
Statements. Roma shall have received audited financial
statements of Sterling as of and for the year ended December 31, 2009 prepared
by McGladrey & Xxxxxx, LLP, together with McGladrey's unqualified opinion on
such financial statements.
Section
8.8 Minimum Tangible
Equity. Sterling’s tangible common equity capital as of the
Closing Date, taking into account all transaction costs and accounting
adjustments (excluding adjustments pursuant to Statement of Financial Accounting
Standards No. 141R) that will be recorded by Sterling as of the Closing Date,
shall be not less than $9,900,000.
Section
8.9 Nonperforming
Assets. Sterling’s Nonperforming Assets, as defined in Section
11.1, shall not exceed $30,000,000 for the period from January 1, 2010 through
the Closing Date.
Section
8.10 Environmental Audit
Results. The results of any environmental audit conducted by
Roma pursuant to Section 5.7 hereof shall not indicate circumstances
or conditions that require remediation with an estimated cost in excess of
$500,000 for all such properties.
Section
8.11 Option Cancellation
Agreements. If the Board of Directors of Sterling has not
taken all action necessary to cause the Sterling Options to be terminated and
canceled at or prior to the Effective Time of the Merger or, in the case of the
2008 Plans, terminated and redeemable at or immediately after the Effective Time
of the Merger for no consideration or, if such Board of Directors action
requires the consent of any option holder, each holder of a Sterling Option
shall have executed and delivered an Option Cancellation and Release Agreement
in the form attached as Exhibit E.
44
Section
8.12 Support
Agreements. Each director and executive officer of Sterling
shall have executed a Support Agreement in the form attached as Exhibit B as of
the date of this Agreement.
Section
8.13 Addenda to Change in Control
Severance Agreements. Designated officers of
Sterling and Sterling Bank (R. Xxxxx Xxxxxx, Xxxx Xxxxxxxx, Xxxxxx
Xxxxxxxxx-Xxxxxxx, Xxxx X. Xxxxx, Xx. and Xxxxxxxx Xxxxxxx) shall have executed
an Addendum to the Change in Control Severance Agreement with Roma and Roma Bank
in the form attached as Exhibit C as of the date of this Agreement.
ARTICLE 9
CONDITIONS
TO OBLIGATIONS OF STERLING
The
obligation of Sterling to consummate the Merger as contemplated herein is
subject to the satisfaction of each of the following conditions, unless waived
as hereinafter provided for:
Section
9.1 Representations
and Warranties. The representations and warranties of
Roma contained in this Agreement or in any certificate or document delivered
pursuant to the provisions hereof will be true and correct, in all material
respects (or where any statement in a representation or warranty expressly
contains a standard of materiality, such statement shall be true and correct in
all respects taking into consideration the standard of materiality contained
therein), as of the Effective Time of the Merger (as though made on and as of
the Effective Time of the Merger), except to the extent such representations and
warranties are by their express provisions made as of a specified date and
except for changes therein contemplated by this Agreement. For
purposes of this paragraph, such representations and warranties shall be deemed
to be true and correct unless the failure of such representations and warranties
to be true and correct, either individually or in the aggregate and without
giving effect to any qualification as to materiality or Material Adverse Effect
set forth in such representations and warranties, will have or is reasonably
likely to have a Material Adverse Effect on Roma and its subsidiaries taken as a
whole.
Section
9.2 Performance
of Obligations. Roma and Roma Bank shall have performed
in all material respects all covenants, obligations and agreements required to
be performed by them under this Agreement prior to the Effective Time of the
Merger.
Section
9.3 Certificate
Representing Satisfaction of Conditions. Roma shall
have delivered to Sterling a certificate of the Chief Executive Officer of Roma
dated as of the Effective Time of the Merger and without personal liability as
to the satisfaction of the matters described in Section 9.1 and Section 9.2
hereof, and such certificate shall be deemed to constitute additional
representations, warranties, covenants, and agreements of Roma under Article 4
of this Agreement.
45
ARTICLE
9
TERMINATION,
WAIVER AND AMENDMENT
Section
10.1 Termination. This
Agreement may be terminated and the Merger abandoned at any time prior to the
Effective Time of the Merger:
(a) by the
mutual consent in writing of the Boards of Directors of Roma and
Sterling;
(b) by the
Board of Directors of Roma or Sterling if the Merger shall not have occurred on
or prior to December 31, 2010, provided that the failure to consummate the
Merger on or before such date is not caused by any breach of any of the
representations, warranties, covenants or other agreements contained herein by
the party electing to terminate pursuant to this Section 10.1(b);
(c) by the
Board of Directors of Roma or Sterling (provided that the terminating party is
not then in breach of any representation or warranty contained in this Agreement
under the applicable standard set forth in Section 8.1 of this Agreement in the
case of Sterling and Section 9.1 in the case of Roma or in breach of any
covenant or agreement contained in this Agreement) in the event of an inaccuracy
of any representation or warranty of the other party contained in this Agreement
that cannot be or has not been cured within thirty (30) days after the giving of
written notice to the breaching party of such inaccuracy and which inaccuracy
would provide the terminating party the ability to refuse to consummate the
Merger under the applicable standard set forth in Section 8.1 of this Agreement
in the case of Sterling and Section 9.1 of this Agreement in the case of
Roma;
(d) by the
Board of Directors of Roma or Sterling (provided that the terminating party is
not then in breach of any representation or warranty contained in this Agreement
under the applicable standard set forth in Section 8.1 of this Agreement in the
case of Sterling and Section 9.1 in the case of Roma or in breach of any
covenant or other agreement contained in this Agreement) in the event of a
material breach by the other party of any covenant or agreement contained in
this Agreement that cannot be or has not been cured within thirty (30) days
after the giving of written notice to the breaching party of such
breach;
(e) by the
Board of Directors of Roma or Sterling in the event (1) any Consent of any
Regulatory Authority required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final nonappealable
action of such authority or if any action taken by such authority is not
appealed within the time limit for appeal, or (2) the shareholders of Sterling
fail to vote their approval of this Agreement and the Merger and the
transactions contemplated hereby as required by applicable law at Sterling’s
shareholders’ meeting where the transactions were presented to such shareholders
for approval and voted upon;
(f) by the
Board of Directors of Roma or Sterling (provided that the terminating party is
not then in breach of any representation or warranty contained in this Agreement
under the applicable standard set forth in Section 8.1 of this Agreement in this
case of Sterling and Section 9.1 in the case of Roma or in breach of any
covenant or agreement contained in this Agreement) upon delivery of written
notice of termination at the time that it is determined that any of the
conditions precedent to the obligations of such party to consummate the Merger
(other than as contemplated by Section 10.1(e) of this Agreement) cannot be
satisfied or fulfilled by the date specified in Section 10.1(b) of this
Agreement;
46
(h) by the
Board of Directors of Roma, (i) if Sterling’s Nonperforming Assets exceed
$30,000,000 for the period from January 1, 2010 through the Closing Date, or
(ii) if Sterling’s tangible common equity capital is less than $9,900,000 on the
Closing Date; or
(i) By the
Board of Directors of Sterling, if, after it has received a Superior Proposal in
compliance with Section 5.5 and otherwise complied with all of its obligations
under Section 5.5, Sterling or any of its subsidiaries enters into a
definitive agreement with respect to, or consummates a transaction
which is the subject of, an Acquisition Proposal; provided, however, that this
Agreement may only be terminated in accordance with this Section 10.1(i) and a
new definitive agreement entered into by Sterling with a third party (A) not
earlier than 72 hours following written notice to Roma advising Roma that the
Board of Directors of Sterling is prepared to accept such Superior Proposal and
(B) after payment, in immediately available funds of the Termination Fee (as
defined below).
Section
10.2 Effect
of Termination; Termination Fee.
(a) In the
event of the termination and abandonment of this Agreement pursuant to Section
10.1, the Agreement shall terminate and have no effect, except as otherwise
provided herein and except that the provisions of this Section 10.2, Section
10.5 and Article 11 of this Agreement shall survive any such termination and
abandonment.
(b) In the
event of termination of this Agreement pursuant to Section 10.1, except as
provided in Section 10.2(c), whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses. In the event of a termination of this Agreement because of
a willful breach of any representation, warranty, covenant or agreement
contained in this Agreement, the breaching party shall remain liable for any and
all damages, costs and expenses, including all reasonable attorneys’ fees,
sustained or incurred by the non-breaching party as a result thereof or in
connection therewith or with respect to the enforcement of its rights
hereunder.
(c) If, after
the date of this Agreement, (i) Roma terminates this Agreement in accordance
with Section 10.1(g) or (ii) Sterling terminates this Agreement in accordance
with Section 10.1(i), then immediately upon the occurrence of the events
specified in Section 10.2(c)(i) or Section 10.2(c)(ii) and in addition to any
other rights and remedies of Roma, Sterling shall pay Roma a cash amount of
$745,000 as an agreed-upon termination fee (the “Termination
Fee”). If, after, the date of this Agreement, Sterling or Roma
terminates this Agreement in accordance with Section 10.1(e)(2) (a “Trigger
Event”) and an Acquisition Transaction, as defined below, involving Sterling is
consummated or a definitive agreement is entered into by Sterling relating to an
Acquisition Transaction, in either case within 18 months following a Trigger
Event (a “Subsequent Trigger Event”), then, upon such Subsequent Trigger Event,
in addition to any other rights and remedies of Roma, Sterling shall pay Roma
the Termination Fee. If payment of the Termination Fee is made, then
Roma will not have any other rights or claims against Sterling or its
subsidiaries, or their respective officers and directors, under this Agreement,
it being agreed that the acceptance of the Termination Fee under
Section
47
10.2(c)
will constitute the sole and exclusive remedy of Roma against Sterling, Sterling
Bank, or their respective officers and directors. For purposes of
this Section 10.2(c), “Acquisition Transaction” means any of the following: (w)
a merger or consolidation, or any similar transaction (other than the Merger) of
any company with Sterling; (x) a purchase, lease or other acquisition of all or
substantially all the assets of Sterling; (y) a purchase or other acquisition of
“beneficial ownership” by any “person” or “group” (as such terms are defined in
Section 13(d)(3) of the Exchange Act) (including by way of merger,
consolidation, share exchange, or otherwise) that would cause such person or
group to become the beneficial owner of securities representing 15% or more of
the voting power of Sterling; or (z) a tender or exchange offer to acquire
securities representing 15% or more of the voting power of
Sterling.
(d) Sterling
and Roma agree that the Termination Fee is fair and reasonable in the
circumstances. If a court of competent jurisdiction shall
nonetheless, by a final, nonappealable judgment, determine that the amount of
any such Termination Fee exceeds the maximum amount permitted by law, then the
amount of such Termination Fee shall be reduced to the maximum amount permitted
by law in the circumstances, as determined by such court of competent
jurisdiction.
Section
10.3 Amendments. To
the extent permitted by law, this Agreement may be amended by a subsequent
writing signed by each of Roma, Roma Bank, Sterling and Sterling
Bank.
Section
10.4 Waivers. Subject
to Section 11.11 hereof, prior to or at the Effective Time of the Merger, Roma,
on the one hand, and Sterling, on the other hand, shall have the right to waive
any default in the performance of any term of this Agreement by the other, to
waive or extend the time for the compliance or fulfillment by the other of any
and all of the other’s obligations under this Agreement and to waive any or all
of the conditions to its obligations under this Agreement, except any condition,
that, if not satisfied, would result in the violation of any law or any
applicable governmental regulation.
Section
10.5 Non-Survival
of Representations, Warranties and Covenants. The
representations, warranties, covenants or agreements in this Agreement or in any
instrument delivered by Roma or Sterling shall not survive the Effective Time of
Merger, except that Section 5.3(b), Section 6.3 and Section 6.4 shall survive
the Effective Time of the Merger, and any representation, warranty or agreement
in any agreement, contract, report, opinion, undertaking or other document or
instrument delivered hereunder in whole or in part by any person other than
Roma, Sterling (or directors and officers thereof in their capacities as such)
shall not survive the Effective Time of Merger; provided that no representation
or warranty of Roma, Roma Bank, Sterling or Sterling Bank contained herein shall
be deemed to be terminated
48
or
extinguished so as to deprive Roma, on the one hand, or Sterling, on the other
hand, of any defense at law or in equity which either of them otherwise would
have to any claim against them by any person, including, without limitation, any
shareholder or former shareholder of either party. No representation
or warranty in this Agreement shall be affected or deemed waived by reason of
the fact that Roma or Sterling and/or its representatives knew or should have
known that any such representation or warranty was, is, might be or might have
been inaccurate in any respect.
ARTICLE
II
MISCELLANEOUS
Section
11.1 Definitions. Except
as otherwise provided herein, the capitalized terms set forth below (in their
singular and plural forms as applicable) shall have the following
meanings:
“Affiliate”
of a person shall mean (i) any other person directly or indirectly through one
or more intermediaries controlling, controlled by or under common control of
such person, (ii) any officer, director, partner, employer or direct or indirect
beneficial owner of 10% or greater equity or voting interest of such
person or (iii) any other persons for which a person described in clause (ii)
acts in any such capacity.
“Consent”
shall mean a consent, approval or authorization, waiver, clearance, exemption or
similar affirmation by any person pursuant to any lease, contract, permit, law,
regulation or order.
“Environmental
Law” means any applicable federal, state or local law, statute, ordinance, rule,
regulation, code, license, permit, authorization, approval, consent, order,
judgment, decree or injunction relating to (i) the protection, preservation or
restoration of the environment (including, without limitation, air, water vapor,
surface water, groundwater, drinking water supply, surface soil, subsurface
soil, plant and animal life or any other natural resource), and/or (ii) the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of any substance presently listed,
defined, designated or classified as hazardous, toxic, radioactive or dangerous,
or otherwise regulated, whether by type or by substance as a
component.
“GAAP”
means generally accepted accounting principles in the United States as in effect
from time to time.
“Hazardous
Material” means any pollutant, contaminant, or hazardous substance within the
meaning of the Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C. § 9601 et seq., or any similar federal, state or local
law. Hazardous Material shall include, but not be limited to, (i) any
hazardous substance, hazardous material, hazardous waste, regulated substance,
or toxic substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum, petroleum
products, or oil (and specifically shall include asbestos requiring abatement,
removal, or encapsulation pursuant to the requirements of governmental
authorities and any polychlorinated biphenyls).
49
“Knowledge” as used with
respect to a Person (including references to such Person being aware of a
particular matter) shall mean those facts that are known, or reasonably should
have been known, by the officers and directors of such Person and its
subsidiaries and includes any facts, matters or circumstances set forth in any
written notice from any bank regulatory agencies or any other material written
notice received by that Person.
“Loan Property” means any
property owned by Sterling or Sterling Bank, or in which Sterling or Sterling
Bank holds a security interest, and, where required by the context, includes the
owner or operator of such property, but only with respect to such
property.
“Material
Adverse Effect,” with respect to any party, shall mean any event, change or
occurrence that, together with any other event, change or occurrence, has a
material adverse impact on (i) the financial position, business or results of
operation, financial performance or prospects of such party and their respective
subsidiaries, if any, taken as a whole, or (ii) the ability of such party to
perform its obligations under this Agreement or to consummate the Merger and the
other transactions contemplated by this Agreement; provided, however, that
“Material Adverse Effect” shall not be deemed to include changes, effects,
events, occurrences or state of facts relating to (i) the economy or financial
markets in general including changes in market interest rates generally, (ii)
actions and omissions of a party hereto (or any of its subsidiaries) taken with
the prior written consent of the other party as permitted by this Agreement,
(iii) the effect of incurring and paying reasonable expenses in connection with
negotiating, entering into, performing and consummating the transactions
contemplated by this Agreement, (iv) changes in applicable laws or the
interpretation thereof generally affecting financial institutions and their
holding companies after the date hereof, and (v) changes in GAAP or the
interpretation thereof generally affecting financial institutions and their
holding companies after the date hereof.
“Named
Officers” means Xxxxxx X. Xxxx, R. Xxxxx Xxxxxx, Xxxx Xxxxxxxx, Xxxxxx
Xxxxxxxxx-Xxxxxxx, Xxxx X. Xxxxx, Xx., Xxxxxxxx Xxxxxxx, Xxxxxxxx Xxxxxxxx and
Xxxxxxx Xxxx.
“Nonperforming
Assets” means the sum of (i) loans in nonaccrual status, as defined in the
Federal Financial Institutions Examination Council Instructions for Preparation
of Consolidated Reports of Condition and Income (“Call Report Instructions”),
(ii) other real estate owned, as defined in the Call Report Instructions and
(iii) troubled debt restructurings, as defined in the Call Report
Instructions.
“Participation
Facility” means any facility in which Sterling or Sterling Bank has engaged in
Participation in the Management of such facility, and, where required by the
context, includes the owner or operator of such facility, but only with respect
to such facility.
“Participation
in the Management” of a facility has the meaning set forth in 42 USC §9601(20)
(E) and (F).
“Regulatory
Authorities” shall mean, collectively, the United States Department of Justice,
the FRB, the FDIC, the Office of Thrift Supervision, and all state regulatory
agencies having jurisdiction over the Parties (including the New Jersey
Department of Banking and Insurance), the Financial Institution Regulatory
Authority and the SEC.
50
“Roma
Schedules” shall mean the disclosure schedules, dated as of the date of this
Agreement and delivered to Sterling by Roma prior to execution of this
Agreement.
“Sterling
Schedules” shall mean the disclosure schedules, dated as of the date of this
Agreement and delivered to Roma by Sterling prior to execution of this
Agreement.
“Subsidiary”
means any corporation, financial institution, joint venture, partnership,
limited liability company, trust or other business entity: (i) 25% or more of
any outstanding class of whose voting interests is directly or indirectly owned
by the relevant Person, or is held by it with power to vote; (ii) the election
of a majority of whose directors, trustees, general partners or comparable
governing body is controlled in any manner by the relevant Person; or (iii) with
respect to the management or policies of which the relevant Person has the
power, directly or indirectly, to exercise a controlling
influence. Subsidiary shall include an indirect Subsidiary of the
relevant Person that is controlled in any manner specified above through one or
more corporations or financial institutions that are themselves
Subsidiaries.
Section
11.2 Entire
Agreement. This Agreement and the documents referred to
herein contain the entire agreement between Roma and Sterling with respect to
the transactions contemplated hereunder, and this Agreement supersedes all prior
arrangements or understandings with respect thereto, whether written or
oral. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the Parties hereto and their respective
successors. Except as expressly set forth in Section 6.4 of this
Agreement, nothing in this Agreement, expressed or implied, is intended to
confer upon any person, firm, corporation or entity, other than the Parties
hereto and their respective successors, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section
11.3 Notices. All
notices, requests or other communications that are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
first class or registered or certified United States mail, postage prepaid, sent
by a nationally recognized overnight delivery service, or facsimile transmission
addressed as follows:
If to
Sterling or Sterling Bank:
Sterling
Banks, Inc.
0000
Xxxxx 00
Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx
X. Xxxx, President and Chief Executive Officer
Facsimile
No.:
With a
copy to:
Xxxxxxx
& Xxx
0000
Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxx
Xxxx, XX 00000-0000
Attention: Xxxxxx
X. Xxxxx, Esq.
Facsimile
No.: (000) 000-0000
51
With a
copy to:
Xxxxxxx
Financial Group, LLC
000
Xxxxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attention: Xxxxxx
X. Xxxxxxx
Facsimile
No. (000) 000-0000
If to
Roma or Roma Bank, then to:
Roma
Financial Corporation
0000
Xxxxx 00
Xxxxxxxxxxxx,
XX 00000
Attention: Xxxxx
X. Xxxxxxx, President and Chief Executive Officer
Facsimile
No.: (000) 000-0000
With a
copy to:
Xxxxxxx
Spidi & Xxxxx, PC
000 Xxx
Xxxx Xxxxxx, XX, Xxxxx 000 Xxxx
Xxxxxxxxxx,
XX 00000
Attention: Xxxxxx
X. Xxxxxxx, Esq.
Xxxxxx X. Xxxx, Esq.
Facsimile
No.: (000) 000-0000
With a
copy to:
FinPro,
Inc.
00 Xxxxxx
Xxxxxx
Xxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx
Xxxxxx
Facsimile
No.: (000) 000-0000
All such
notices or other communications shall be deemed to have been delivered (i) upon
receipt when delivery is made by hand, (ii) on the business day after being
deposited with a nationally recognized overnight delivery service, (iii) on the
third (3rd)
business day after deposit in the United States mail when delivery is made by
first class, registered or certified mail, and (iv) on the business day after
transmission when made by facsimile transmission if evidenced by a sender
transmission completed confirmation.
Section
11.4 Severability. If
any term, provision, covenant or restriction contained in this Agreement is held
by a court of competent jurisdiction or other competent authority to be invalid,
void or unenforceable or against public or regulatory policy, the remainder of
the terms, provisions, covenants and restrictions contained in this Agreement
shall remain in full force and effect and in no way shall be affected, impaired
or invalidated, if, but only if, pursuant to such remaining terms, provisions,
covenants and restrictions the Merger may be consummated in substantially the
same manner as set forth in this Agreement as of the later of the date this
Agreement was executed or last amended.
52
Section
11.5 Costs
and Expenses. Except as set forth in Section 10.2,
expenses incurred by Sterling on the one hand and Roma on the other hand, in
connection with or related to the authorization, preparation and execution of
this Agreement, the solicitation of shareholder approval and all other matters
related to the closing of the transactions contemplated hereby, including all
fees and expenses of agents, representatives, counsel and accountants employed
by either such party or its Affiliates, shall be borne solely and entirely by
the party that has incurred same.
Section
11.6 Captions. The
captions as to contents of particular articles, sections or paragraphs contained
in this Agreement and the table of contents hereto are inserted only for
convenience and are in no way to be construed as part of this Agreement or as a
limitation on the scope of the particular articles, sections or paragraphs to
which they refer.
Section
11.7 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
document with the same force and effect as though all parties had executed the
same document.
Section
11.8 Persons
Bound; No Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the Parties hereto and their respective
successors, distributees, and assigns, but notwithstanding the foregoing, this
Agreement may not be assigned by any party hereto unless the prior written
consent of the other Parties is first obtained (other than by Roma to a
subsidiary of Roma or Roma Bank).
Section
11.9 Governing
Law. This Agreement is made and shall be governed by
and construed in accordance with the laws of the State of New Jersey (without
respect to its conflicts of laws principles) except to the extent federal law
may apply.
Section
11.10 Exhibits
and Schedules. Each of the exhibits and schedules
attached hereto is an integral part of this Agreement and shall be applicable as
if set forth in full at the point in the Agreement where reference to it is
made.
Section
11.11 Waiver. The
waiver by any party of the performance of any agreement, covenant, condition or
warranty contained herein shall not invalidate this Agreement, nor shall it be
considered a waiver of any other agreement, covenant, condition or warranty
contained in this Agreement. A waiver by any party of the time for
performing any act shall not be deemed a waiver of the time for performing any
other act or an act required to be performed at a later time. The
exercise of any remedy provided by law, equity or otherwise and the provisions
in this Agreement for any remedy shall not exclude any other remedy unless it is
expressly excluded. The waiver of any provision of this Agreement
must be signed by the Party or Parties against whom enforcement of the waiver is
sought. This Agreement and any exhibit, memorandum or schedule hereto
or delivered in connection herewith may be amended only by a writing signed on
behalf of each party hereto.
Section
11.12 Specific
Performance. The Parties hereto agree that irreparable damage
would occur in the event that the provisions contained in this Agreement were
not performed in accordance with its specific terms or were otherwise
breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
53
Section
11.13 Construction
of Terms. Whenever used in this Agreement, the singular
number shall include the plural and the plural the singular. Pronouns
of one gender shall
include all genders. Accounting terms used and not otherwise defined
in this Agreement have the meanings determined by, and all calculations with
respect to accounting or financial matters unless otherwise provided for herein,
shall be computed in accordance with GAAP, consistently
applied. References herein to articles, sections, paragraphs,
subparagraphs or the like shall refer to the corresponding articles, sections,
paragraphs, subparagraphs or the like of this Agreement. The words
“hereof”, “herein”, and terms of similar import shall refer to this entire
Agreement. Unless the context clearly requires otherwise, the use of
the terms “including”, “included”, “such as”, or terms of similar meaning, shall
not be construed to imply the exclusion of any other particular
elements. The recitals hereto constitute an integral part of this
Agreement.
[SIGNATURE
PAGE FOLLOWS]
54
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in
counterparts and delivered, and their respective seals hereunto affixed, by
their officers thereunto duly authorized, and have caused this Agreement to be
dated as of the date and year first above written.
[CORPORATE
SEAL]
|
ROMA FINANCIAL
CORPORATION
|
By: /s/Xxxxx X.
Xxxxxxx
Xxxxx
X. Xxxxxxx
President
and Chief Executive Officer
ATTEST:
/s/Xxxxxxxx X.
Xxxxxx
Its
Secretary
[CORPORATE
SEAL]
|
ROMA
BANK
|
By: /s/Xxxxx X.
Xxxxxxx
Xxxxx X.
Xxxxxxx
President and
Chief Executive Officer
|
ATTEST:
/s/Xxxxxxxx X.
Xxxxxx
Its
Secretary
[CORPORATE
SEAL]
|
STERLING BANKS,
INC.
|
By: /s/Xxxxxx X.
Xxxx
Xxxxxx
X. Xxxx
President
and Chief Executive Officer
ATTEST:
/s/R. Xxxxx
Xxxxxx
Its
Secretary
55
[CORPORATE
SEAL] STERLING BANK
By: /s/Xxxxxx X.
Xxxx
Xxxxxx
X. Xxxx
President
and Chief Executive Officer
ATTEST:
/s/R. Xxxxx
Xxxxxx
Its
Secretary
56